Finance Act

A Finance Act is the fiscal legislation enacted by the Indian Parliament to give
effect to the financial proposals of the Central Government. It is enacted once a
year and contains provisions relating to income taxes, customs, excise, Central and
Integrated GST and other cess, exemptions, and reliefs. It may also contain
provisions to amend other acts as the Government to affect its fiscal policy. The
bill is usually termed the budget and it is introduced in Parliament by the Finance
Minister.

All the elements included in the Finance Act associated with a particular Financial
Year are of course important. Even so, there are particular elements that take
precedence over the others.
The most important element is the rules laid down in the Act with respect to
Income Tax Rates. Every year, the Act lays down in detail all the associated
provisions related to Income Tax in the country. Since this applies to a large
number of taxpayers, it is considered one of the most important elements.
The Finance Act is responsible for laying down the tax slabs that applies to
taxpayers. The Act includes various details related to:

 Income through Salary

 Agricultural Income
 Tax slabs for Senior Citizens
 Tax slabs for Very Senior Citizens
 Income Tax Surcharges
 Taxes chargeable to companies
 Advance tax
These are a few important elements included and elaborated upon in detail in
the Finance Act for a particular year.
The Finance Act for a particular financial year also includes the amendments that
have been made with respect to Direct Taxes.
The Amendments made under various sections are noted down in this section of
the Finance Act and each amendment of every section is noted down separately.
Also included in the Finance Act, is the details of the insertion of new sections, if
any.
The Schedule

The Schedule in any Finance Act is a systematic depiction of all the rules and
regulations laid down by the Act for that Financial Year.
The Schedule gives details on

 Rates of Income Tax

 Surcharge on Income Tax
 Rates for Deduction of Tax at Source
 Details of Advance Tax
 Details for computation of Net Agricultural Income

Why Finance Bill is needed

The Union Budget proposes many tax changes for the upcoming financial year,
even if not all of those proposed changes find 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 when becomes an Act inserts 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.