{"id":14888,"date":"2021-04-21T00:00:00","date_gmt":"2021-04-21T00:00:00","guid":{"rendered":"https:\/\/www.nextias.com\/current_affairs\/uncategorized\/21-04-2021\/finance-bill-2021\/"},"modified":"2021-04-21T00:00:00","modified_gmt":"2021-04-21T00:00:00","slug":"finance-bill-2021","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/21-04-2021\/finance-bill-2021","title":{"rendered":"Finance Bill 2021"},"content":{"rendered":"<p><span style=\"font-size:11pt\"><span style=\"font-family:Arial,sans-serif\"><strong><u>In News<\/u><\/strong><\/span><\/span><\/p>\n<p><span style=\"font-size:11pt\"><span style=\"font-family:Arial,sans-serif\">The Union Cabinet gave ex-post facto approval to the official amendments to the <strong>Finance Bill, 2021.<\/strong><\/span><\/span><\/p>\n<ul>\n<li><span style=\"font-size:11pt\"><span style=\"font-family:Arial,sans-serif\">The bill has already been enacted as Finance Act 2021<strong>.<\/strong><\/span><\/span><\/li>\n<\/ul>\n<p><span style=\"font-size:11pt\"><span style=\"font-family:Arial,sans-serif\"><strong><u>Major Points of the Amendments<\/u><\/strong><\/span><\/span><\/p>\n<ul>\n<li><span style=\"font-size:11pt\"><span style=\"font-family:Arial,sans-serif\">The Government amendments to the Finance Bill, 2021 are <strong>tax proposals<\/strong> that shall <strong>generate timely revenue<\/strong> for the Government and <strong>streamline existing<\/strong> provisions by addressing grievances of the taxpayers.<\/span><\/span><\/li>\n<\/ul>\n<ul>\n<li><span style=\"font-size:11pt\"><span style=\"font-family:Arial,sans-serif\">The Finance Bill, which gives effect to tax proposals for FY22, was passed in Parliament in March with 127 amendments.<\/span><\/span>\n<ul>\n<li><span style=\"font-size:11pt\"><span style=\"font-family:Arial,sans-serif\">Among other changes, it has provided for a<strong> 10-year income tax exemption<\/strong> to the National Bank for Financing Infrastructure and Development. <\/span><\/span><\/li>\n<li><span style=\"font-size:11pt\"><span style=\"font-family:Arial,sans-serif\"><strong>Private development finance institutions<\/strong> were provided with a<strong> five-year tax <\/strong>exemption, which can be <strong>extended by another five years<\/strong>.<\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li><span style=\"font-size:11pt\"><span style=\"font-family:Arial,sans-serif\">The amendment also clarified that the <strong>equalization levy<\/strong> <strong>would not be applicable<\/strong> on consideration of the sale of goods or services which are owned by persons resident in India or by a permanent establishment of a non-resident in India.<\/span><\/span>\n<ul>\n<li><span style=\"font-size:11pt\"><span style=\"font-family:Arial,sans-serif\"><strong>Equalisation Levy <\/strong>is a direct tax, which is withheld at the time of payment by the service recipient.<\/span><\/span>\n<ul>\n<li><span style=\"font-size:11pt\"><span style=\"font-family:Arial,sans-serif\"><strong>It <\/strong>was first introduced by <strong>Finance Act, 2016<\/strong>, at the rate of 6 per cent on payments for digital advertising services received by non-resident companies without a permanent establishment (PE) in India, if these exceeded Rs 1 lakh a year.<\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><span style=\"font-size:11pt\"><span style=\"font-family:Arial,sans-serif\"><strong><u>Why is the Finance bill Needed?<\/u><\/strong><\/span><\/span><\/p>\n<ul>\n<li><span style=\"font-size:11pt\"><span style=\"font-family:Arial,sans-serif\">The Finance Bill seeks to insert amendments into several existing laws concerned, without bringing out a separate amendment law for each of those Acts.<\/span><\/span>\n<ul>\n<li><span style=\"font-size:11pt\"><span style=\"font-family:Arial,sans-serif\">For instance, a Union Budget\u2019s proposed tax changes may require amending the various sections of the Income Tax law, Stamp Act, Money Laundering law, etc.<\/span><\/span><\/li>\n<li><span style=\"font-size:11pt\"><span style=\"font-family:Arial,sans-serif\">The Finance Bill overrides and makes changes in the existing laws wherever required.<\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><span style=\"font-size:11pt\"><span style=\"font-family:Arial,sans-serif\"><strong><u>What is a Finance Bill?<\/u><\/strong><\/span><\/span><\/p>\n<ul>\n<li><span style=\"font-size:11pt\"><span style=\"font-family:Arial,sans-serif\">It is a Bill that contains some provisions related to<strong> taxation and expenditure,<\/strong> and additionally <strong>contains provisions related to any other matter<\/strong> is called a Financial Bill. <\/span><\/span><\/li>\n<li><span style=\"font-size:11pt\"><span style=\"font-family:Arial,sans-serif\"><strong>Rule 219 of the Rules of Procedure of Lok Sabha states: <\/strong><\/span><\/span>\n<ul>\n<li><span style=\"font-size:11pt\"><span style=\"font-family:Arial,sans-serif\"><strong>\u2018Finance Bill<\/strong>\u2019 means the Bill ordinarily introduced <strong>each year<\/strong> to give effect to the <strong>financial proposals<\/strong> of the Government of India for the f<strong>ollowing financial year <\/strong>and includes a Bill to give effect to<strong> supplementary financial proposals for any period.<\/strong><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<li><span style=\"font-size:11pt\"><span style=\"font-family:Arial,sans-serif\">It is a part of the Union Budget, stipulating all the legal amendments required for the changes in taxation proposed by the Finance Minister.<\/span><\/span><\/li>\n<li><span style=\"font-size:11pt\"><span style=\"font-family:Arial,sans-serif\">There are different kinds of Finance Bills \u2014 the most important of them is the <strong>Money Bill.<\/strong> The Money Bill is concretely <strong>defined in Article 110.<\/strong><\/span><\/span><\/li>\n<li><span style=\"font-size:11pt\"><span style=\"font-family:Arial,sans-serif\"><strong>T<\/strong>he <strong>Speaker of the Lok Sabha<\/strong> is authorised to decide whether the Bill is a Money Bill or not. Also, the Speaker\u2019s decision shall be deemed to be final.<\/span><\/span><\/li>\n<li><span style=\"font-size:11pt\"><span style=\"font-family:Arial,sans-serif\">The Finance Bill, as a Money Bill, needs to be passed by the Lok Sabha \u2014 the lower house of the Parliament. Post the Lok Sabha\u2019s approval, the Finance Bill becomes Finance Act.<\/span><\/span><\/li>\n<\/ul>\n<p><span style=\"font-size:11pt\"><span style=\"font-family:Arial,sans-serif\"><strong><u>Difference between a Money Bill and the Finance Bill<\/u><\/strong><\/span><\/span><\/p>\n<p><span style=\"font-size:11pt\"><span style=\"font-family:Arial,sans-serif\">All Money Bills are Financial Bills, all Financial Bills are not Money Bills.\u00a0 <\/span><\/span><\/p>\n<table cellspacing=\"0\" class=\"Table\" style=\"border-collapse:collapse; border:none; width:624px\">\n<tbody>\n<tr>\n<td style=\"background-color:#efefef; border-bottom:1px solid black; border-left:1px solid black; border-right:1px solid black; border-top:1px solid black; vertical-align:top; width:312px\">\n<p style=\"text-align:center\"><span style=\"font-size:11pt\"><span style=\"font-family:Arial,sans-serif\"><strong>Money Bill <\/strong><\/span><\/span><\/p>\n<\/td>\n<td style=\"background-color:#efefef; border-bottom:1px solid black; border-left:none; border-right:1px solid black; border-top:1px solid black; vertical-align:top; width:312px\">\n<p style=\"text-align:center\"><span style=\"font-size:11pt\"><span style=\"font-family:Arial,sans-serif\">\u00a0<strong>Finance Bill <\/strong><\/span><\/span><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td style=\"background-color:#fff2cc; border-bottom:1px solid black; border-left:1px solid black; border-right:1px solid black; border-top:none; vertical-align:top; width:312px\">\n<ul>\n<li><span style=\"font-size:11pt\"><span style=\"font-family:Arial,sans-serif\">The Finance Bill only contains provisions related to tax proposals and <strong>expenditur<\/strong>e from or receipt to the Consolidated Fund of India would be a Money Bill. <\/span><\/span><\/li>\n<li><span style=\"font-size:11pt\"><span style=\"font-family:Arial,sans-serif\">A Money Bill has to be <strong>introduced in the<\/strong> <strong>Lok Sabha<\/strong> as per Section 110 of the Constitution. Then, it is transmitted to the Rajya Sabha for its recommendations. <\/span><\/span>\n<ul>\n<li><span style=\"font-size:11pt\"><span style=\"font-family:Arial,sans-serif\">The Rajya Sabha has to return the Bill with recommendations in 14 days.<\/span><\/span>\n<ul>\n<li><span style=\"font-size:11pt\"><span style=\"font-family:Arial,sans-serif\">However, the Lok Sabha can reject all or some of the recommendations<\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<\/td>\n<td style=\"background-color:#fff2cc; border-bottom:1px solid black; border-left:none; border-right:1px solid black; border-top:none; vertical-align:top; width:312px\">\n<ul>\n<li><span style=\"font-size:11pt\"><span style=\"font-family:Arial,sans-serif\">A Bill that contains some provisions related to taxation or expenditure, but also covers other matters would be considered a <strong>Financial Bill<\/strong><\/span><\/span><\/li>\n<li><span style=\"font-size:11pt\"><span style=\"font-family:Arial,sans-serif\">In the case of a<strong> Finance Bill, Article 117 <\/strong>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<strong> President\u2019s recommendation. <\/strong><\/span><\/span><\/li>\n<li><span style=\"font-size:11pt\"><span style=\"font-family:Arial,sans-serif\">Also, a Bill that makes such provisions shall not be introduced in the Rajya Sabha.<\/span><\/span><\/li>\n<li><span style=\"font-size:11pt\"><span style=\"font-family:Arial,sans-serif\">The Bill must be passed by both Houses of Parliament after the President has recommended that it be taken up for consideration in each House.<\/span><\/span><\/li>\n<\/ul>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><span style=\"font-size:11pt\"><span style=\"font-family:Arial,sans-serif\"><a href=\"https:\/\/indianexpress.com\/article\/business\/finance-bill-2021-cabinet-gives-ex-post-facto-nod-to-amendments-7282285\/\" target=\"_blank\" rel=\"noopener\"><span style=\"color:#1155cc\">Source :IE<\/span><\/a><\/span><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In News The Union Cabinet gave ex-post facto approval to the official amendments to the Finance Bill, 2021. The bill has already been enacted as Finance Act 2021. Major Points of the Amendments The Government amendments to the Finance Bill, 2021 are tax proposals that shall generate timely revenue for the Government and streamline existing [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":14889,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[70,30],"class_list":["post-14888","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-current-affairs","tag-features-amendments","tag-gs-2"],"acf":[],"jetpack_featured_media_url":"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2023\/07\/7512490current-affairs.jpg","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/14888","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=14888"}],"version-history":[{"count":0,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/14888\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media\/14889"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=14888"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=14888"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=14888"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}