Why in the News?
The Finance Bill 2024 was passed by the Lok Sabha with amendments that eased the proposed Long-Term Capital Gains Tax (CGT) on real estate.
The Finance Bill is a component of the Union Budget, outlining the legal amendments needed to implement the changes in taxation proposed by the Finance Minister.
The financial Bills are of the following types:
- Money Bill
- Financial Bill I
- Financial Bill II
- Money Bill:
- It can be introduced only in Lok Sabha.
- It is introduced on the prior recommendation of the President.
- It generally deals with matters such as the imposition of tax, regulation of borrowings, appropriation of money out of CFI, declaration of expense as charged upon CFI, etc.
- The governmental finances are of extreme importance and keeping in mind the fiscal aspect of the union’s administration the Money bill has been provided with certain provisions:
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Financial BilI:
- It deals with the matters wherein it has any or all matters of Article 110 but importantly it also deals with other general legislations.
- It is similar to the Money Bill in the following ways:
- It can be introduced only in the Lok Sabha.
- It requires the prior recommendation of the President.
- It is like an ordinary bill on all other matters. That is, it can be rejected by the Rajya Sabha, or it can be delayed beyond 14 days.
- A joint sitting can be called in case of a deadlock.
Financial Bill II:
- This generally deals with those matters where expenditure is involved from CFI but not the matters mentioned in Article 110.
- It can be introduced in either House of the Parliament.
- The recommendation of the President is required at the consideration stage.
How is a Money Bill different from a Financial Bill?
While all Money Bills are Financial Bills, all Financial Bills are not Money Bills. For instance, the Finance Bill, which solely includes tax-related provisions, is classified as a Money Bill.
On the other hand, a bill that includes provisions related to taxation or government spending but also addresses other matters is categorized as a Financial Bill.
The Rajya Sabha does not have the authority to amend or reject a Money Bill, but it can amend or reject a Financial Bill.
Both Money Bills and Financial Bills
- Money Bills can only be introduced in the Lok Sabha,
- whereas a Financial Bill can be introduced in either the Rajya Sabha or the Lok Sabha.
In the event of a deadlock over a financial bill, the president can call for a joint meeting between Lok Sabha and Rajya Sabha. However, no such provision exists for a Money Bill.
Features |
Money Bill Article 110 |
Financial Bill Article 117(1) |
Financial Bill Article 117 (2) |
Purpose |
Matters under Article 110 |
Matters under Article 110 and ‘’ General Legislation ‘’ |
Expenditure from CFI but not matters listed under Article 110 |
Introduced by |
Only by a Minister Only in Lok Sabha |
Only by a Minister Only in Lok Sabha |
Generally a Minister |
Role of Rajya Sabha |
Returns with or without recommendation |
Can reject or amend the bill |
Can reject or amend the bill |
Role of Speaker |
No specific role |
No specific role |
No specific role |
Required Majority |
Simple Majority |
Simple Majority |
Simple Majority |
President’s Role |
Give or withhold assent but cannot return |
Give, without or return the bill for reconsideration |
Give, without or return the bill for reconsideration |
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