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What is the Finance Bill?

IndianMoney.com Research Team | Posted On Monday, February 11,2019, 02:30 PM

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What is the Finance Bill?

 

 

What is the finance bill?

Finance bill is a bill presented in the Lok Sabha each year after the presentation of the Union Budget, to bring into effect the financial proposals of the Government of India.

The finance bill is a legislative bill that proposes the charges levied by the government on taxes, duties, exemptions and relief. The finance bill lays out the various modification made by the Government for the upcoming financial year like levying new taxes, modification on existing tax structure, making changes in the revenue or taxation format, imposing exemptions for farmers, government employees and announcing relief and new government schemes, to lay focus on certain important areas of the economy.

This bill is submitted in the Parliament to be passed and implemented in the upcoming financial year. The finance bill is supplemented by a memorandum that contains explanations regarding the provisions included in it. Finance bill can only be introduced in Lok Sabha on recommendation of the President and should be passed by both the houses of the Indian Parliament (i.e. Lok Sabha and Rajya Sabha) by a simple majority.

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What is the Finance Bill?

Article 110 (1) (a) of the Constitution:

As per article 110 of the constitution, a finance bill is a money bill. The finance bill is a legislation introduced in Lok Sabha to bring into effect the tax proposals of the Government. A Bill shall be deemed a Money Bill if it contains only provisions dealing with all or any of the following matters, namely:

  • The imposition, abolition, remission, alteration or regulation of any tax;
  • The regulation of the borrowing of money or the giving of any guarantee by the Government of India, or the amendment of the law with respect to any financial obligations undertaken or to be undertaken by the Government of India;
  • The custody of the consolidated Fund or the Contingency Fund of India, the payment of money into or the withdrawal of money from any such Fund;
  • The appropriation of money out of the consolidated Fund of India;
  • The declaring of any expenditure to be charged on the Consolidated Fund of India or the increasing of any such expenditure;
  • The receipt of money on account of the Consolidated Fund of India or the public account of India or the custody or issue of such money or the audit of the accounts of the Union or State;
  • Any matter incidental to any of the matters specified in sub clause (a) to (f)

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Money bill in India:

Money bill refers to a bill that is introduced in the Indian Parliament. The money bill brings into effect the government’s proposal and covers the issues related to spending of money like tax laws, laws related to loans and expenditure of the government. Examples of money bills are finance bills and appropriation bills.

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Features of Money Bills:

Money bills have some special features. They are as follows:

  • A money bill originates or is introduced only in the Lok Sabha.
  • A money bill can be introduced on prior recommendations of the President.
  • A money bill can only be a government bill. No private bill can be a money bill.
  • A money bill is passed in the Lok Sabha and then it is sent to the Rajya Sabha for recommendations.
  • The Rajya Sabha can neither reject nor amend the money bill. It has the power to make recommendations only.
  • The Lok Sabha may or may not accept the recommendations of the Rajya Sabha. The maximum duration of returning the bill from Rajya Sabha is 14 days. If the bill is not returned within 14 days, it is considered passed in both the houses of Parliament.
  • President can withhold assent to money bills but cannot return it for reconsideration in the Lok Sabha.

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Types of bills in Indian Parliament:

There are four types of bills introduced in the Indian parliament. They are as follows:

  • Money bills: money bills refer to a draft introduced in the lower houses of Parliament that deal with taxes, borrowings, consolidated and contingency funds, audit and accounting.
  • Finance bills: A bill dealing with revenue and expenditure but not certified as money bill is known as finance bill.
  • Ordinary bills: Ordinary bills are the bills that deal with matters other than finance bills, money bills and constitutional amendment bills.
  • Constitutional amendment bills: A bill which is forwarded to make amendments in the constitution is known as constitutional amendment bill. The Bill is introduced in both the houses of the parliament and need to be passed by the required majority, and then presented to the President who shall give his assent to the Bill.

Rule 219 - Rules of Procedure of Lok Sabha:

This rule in the Lok Sabha rule book defines the procedures regarding the finance bill. Listed below are procedures mentioned under Rule 21 of The Rules of Procedure and Conduct of Business in the Lok Sabha:

  • In this rule “Finance Bill” means the Bill ordinarily introduced each year to give effect to the financial proposals of the Government of India for the next financial year and includes a Bill to give effect to supplementary financial proposals for any period.
  • At any time after the introduction in the House of a Finance Bill, the Speaker may allot a day or days, for the completion of all or any of the stages involved in the passage of the Bill by the House, and when such allotment has been made, the Speaker on the allotted day or the last of the allotted days, as the case may be, forthwith put every question necessary to dispose of all the outstanding matters in connection with the stage or stages for which the day or days have been allotted.
  • Where the question or one of the questions required by sub-rule (2) to be put at 7(the specified hour) on the allotted day or the last of the allotted days is that the Bill be passed, sub-rule (2) shall have effect notwithstanding that amendments to the Bill have been made.
  • Subject to the provision to sub-rule (2), the Speaker, if he thinks fit, may prescribe a time-limit for speeches at all or any of the stages for which a day or days have been allotted under that sub-rule.
  • On a motion that the Finance Bill be taken into consideration, a member may discuss matters relating to general administration, local grievances within the sphere of the responsibility of Government of India or monetary or financial policy of Government.

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