The Finance Bill 2025 implements the Union Budget, setting tax policies and expenditures. It raised the income tax exemption to ₹12 lakh and abolished the 6% equalization levy. Parliament debates and approves it, with the Lok Sabha holding primary authority. The Appropriation Bill complements it by allocating funds to ministries.
Copyright infringement not intended
Parliament Passed Finance Bill 2025.
It is a legislative proposal introduced in the Lok Sabha to implement the Government's financial proposals for the upcoming fiscal year.
It deals with taxes, government expenditures, borrowings, and revenues. The Finance Bill is crucial because it translates the Union Budget into law, ensuring that the government has the legal authority to collect taxes and allocate funds for various programs and schemes.
While all Money Bills are Financial Bills, not all Financial Bills are Money Bills.
Money Bill
Financial Bill (Category 1):
Financial Bill (Category 2):
The government abolished a 6% equalization levy on online advertisements to ease the burden on businesses operating in the digital space and promote growth in the sector.
The government raised the income tax exemption limit to Rs 12 lakh , ensuring that individuals earning below this amount will not pay any income tax.
The Union Budget 2025-26 proposes a total expenditure of Rs 50.65 trillion.
Capital expenditure is set at Rs 11.22 trillion , with an effective capital expenditure target of Rs 15.48 trillion .
Gross tax revenue collection is projected at Rs 42.70 trillion , while gross borrowing is estimated at Rs 14.01 trillion.
Resources transferred to states, including devolution of their share, grants/loans, and releases under Centrally Sponsored Schemes, total Rs 25.01 trillion.
According to Article 117(1) of the Constitution of India, a Finance Bill, specifically one that involves matters specified in Article 110, can only be introduced in the Lok Sabha and requires the President's prior recommendation.
The Lok Sabha debates and passes the Finance Bill first. The Rajya Sabha reviews the bill, suggests amendments, and returns it to the Lok Sabha. However, the Rajya Sabha cannot reject or delay the bill indefinitely. In case of disagreements, the President may summon a joint sitting of both Houses to resolve the deadlock.
The Appropriation Bill complements the Finance Bill by authorizing the government to withdraw funds from the Consolidated Fund of India for specific purposes.
While the Finance Bill outlines the financial framework, the Appropriation Bill allocates resources to ministries and departments.
Must Read Articles:
INCOME TAX BILL 2025 SIMPLIFIES
LITTLE HAS CHANGED IN THE INCOME-TAX BILL, 2025
Source:
|
PRACTICE QUESTION Q. Consider the following statements about Money Bills: 1. A Money Bill can be introduced in either the Lok Sabha or the Rajya Sabha. 2. The Speaker of the Lok Sabha has the final authority to decide whether a bill is a Money Bill. 3. The Rajya Sabha can amend a Money Bill passed by the Lok Sabha. Which of the statements given above is/are correct? A) 1 only B) 2 only C) 1 and 3 only D) 2 and 3 only Answer: B Explanation: Statement 1 is incorrect: Article 109(1) of the Constitution explicitly states that a Money Bill can only be introduced in the Lok Sabha (House of the People). Statement 2 is correct: Article 110(3) of the Constitution grants the Speaker of the Lok Sabha the final authority to certify whether a particular bill is a Money Bill. The Speaker's decision on this matter is conclusive and cannot be questioned. When a Money Bill is transmitted to the Rajya Sabha or presented to the President for assent, the Speaker endorses it with a certificate stating that it is a Money Bill. Statement 3 is incorrect: While a Money Bill is transmitted to the Rajya Sabha for its consideration, the Rajya Sabha has limited powers concerning it. According to Article 109(2), the Rajya Sabha cannot amend a Money Bill. It can only suggest amendments. The Rajya Sabha must return the Money Bill to the Lok Sabha within 14 days from the date of its receipt, with or without recommendations. It is then up to the Lok Sabha to either accept or reject all or any of the recommendations made by the Rajya Sabha. If the Lok Sabha accepts any of the recommendations, the Money Bill is deemed to have been passed by both Houses with the amendments. If the Lok Sabha does not accept any of the recommendations, the Money Bill is deemed to have been passed by both Houses in the form in which it was passed by the Lok Sabha originally. |
© 2025 iasgyan. All right reserved
