As per Article 110 of the Constitution of India, the Finance Bill is a Money Bill. The
Finance Bill is a part of the Union Budget, stipulating all the legal amendments required
for the changes in taxation proposed by the Finance Minister.
This Bill encompasses all amendments required in various laws pertaining to tax, in
accordance with the tax proposals made in the Union Budget.
The Finance Bill, as a Money Bill, needs to be passed by the Lok Sabha — the lower
house of the Parliament.
Rule 219: The Finance Bill fi nds its mention in Rule 219 of the Rules of Procedure of Lok
Sabha.
The Speaker of the Lok Sabha is authorised to decide whether the Bill is a Money Bill or
not. Also, the Speaker’s decision shall be deemed to be fi nal.
Post the Lok Sabha’s approval, the Finance Bill becomes Finance Act.
The need of Finance Bill:
The Union Budget proposes many tax changes for the upcoming fi nancial year, even
if not all of those proposed changes fi nd a mention in the Finance Minister’s Budget
speech.
These proposed changes pertain to several existing laws dealing with various taxes in
the country.
The Finance Bill seeks to insert amendments into all those laws concerned, without
having to bring out a separate amendment law for each of those Acts.
For instance, a Union Budget’s proposed tax changes may require amending the various
sections of the Income Tax law, Stamp Act, Money Laundering law, etc.
The Finance Bill overrides and makes changes in the existing laws wherever required.
Difference between a Money Bill and the Finance Bill:
A Money Bill has to be introduced in the Lok Sabha as per Section 110 of the Constitution.
Then, it is transmitted to the Rajya Sabha for its recommendations.
The Rajya Sabha has to return the Bill with recommendations in 14 days. However, the
Lok Sabha can reject all or some of the recommendations.
In the case of a Finance Bill, Article 117 of the Constitution categorically lays down that
a Bill pertaining to sub-clauses (a) to (f) of clause (1) shall not be introduced or moved
except with the President’s recommendation.
Also, a Bill that makes such provisions shall not be introduced in the Rajya Sabha.
Under article 110(1) of the Constitution of India, a Financial Bill is deemed
to be a Money Bill if it contains only provisions dealing with all or any of the
following matters, namely:
The remission imposition, abolition, alteration or regulation of any tax
The regulation of the money borrowed the giving of any guarantee by the
government, the amendment of the law with respect to any fi nancial obligations
undertaken or to be undertaken by the government.
The custody of the consolidated fund of India (CFI) or the contingency fund of India,
the payment of money into or the withdrawal of money from any such fund.
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