Finance Bill, 2020 passed in Lok Sabha

News: Finance bill 2020 passed in Lok Sabha

Facts:

Key highlights

• Non-resident Indians will be taxed on India-controlled income above Rs 15 lakh.
• DDT exemption will be given to REITs and InvITs if not under the new corporate tax regime.
• Tax exemption to Sovereign Wealth Fund extended to Pension Funds for infra investment.
• TDS rate on payment of dividend to non-resident, foreign companies at 20% with effect from October 1, 2020.
• Government given power to raise special additional excise duty, when needed, by up to ₹18 a litre on petrol, up from ₹10 now and up to ₹12 a litre on diesel, up from ₹4 at present.

Additional Information:

Finance Bill: 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.

Difference between Financial Bill and Money Bill

Definition:

• Money Bill: A Bill is said to be a Money Bill if it only contains provisions related to taxation, borrowing of money by the government, expenditure from or receipt to the Consolidated Fund of India. It deals solely with matters listed under Article 110 (1) (a) to (g) of the Indian Constitution.
• Financial Bill: A Bill that contains some provisions related to taxation and expenditure, and additionally contains provisions related to any other matter. It is listed under Article 117 (1) of the Indian Constitution.

Scope: All Money Bills are Financial Bills, all Financial Bills are not Money Bills. For example, the Finance Bill which only contains provisions related to tax proposals would be a Money Bill.  However, a Bill that contains some provisions related to taxation or expenditure, but also covers other matters would be considered as a Finance Bill.

Procedure: The Rajya Sabha has no power to reject or amend a Money Bill.  However, a Finance Bill must be passed by both Houses of Parliament.