Finance Bill
Topic: Government Budget, Fiscal Policy and FRBM · NCERT: Class 12, Ch 5 "Government Budget and the Economy"
Meaning
The Finance Bill is the bill that turns the budget's tax proposals into law. It covers the imposition, abolition, remission, alteration or regulation of taxes. It is presented together with the Annual Financial Statement. Under the Provisional Collection of Taxes Act, 1931, new tax rates apply as soon as the bill is introduced. But Parliament must pass the bill within 75 days. Once passed, it becomes the Finance Act.
Example
If the budget raises the income-tax rebate threshold, for example to ₹12 lakh under the new regime in 2025-26, that change is written into the Finance Bill. It takes legal effect when the bill becomes the Finance Act.
Don't confuse with
- Appropriation Bill: this bill, under Article 114, allows the government to withdraw money from the Consolidated Fund to spend. The Finance Bill deals with raising money through taxes.
Related concepts
- Demand for grants
- Cut motion
- Guillotine
- Appropriation Bill
- Money Bill
- Vote on account
- Interim budget
- Supplementary grant
- Excess grant
- Vote of credit