• The Lok Sabha passed the Finance Bill 2025, marking a key legislative step in implementing the Union Budget 2025-26. 

• With the Lok Sabha’s approval, the Finance Bill 2025 now moves to the Rajya Sabha for further discussion. While the Upper House can suggest amendments, the final authority rests with the Lok Sabha. 

• Once passed, the Bill will formalise tax proposals from the Union Budget 2025-26, including changes in income tax slabs, corporate taxes, and GST adjustments.

Financial legislation

The Constitution divides financial legislation into two categories — Money Bills and Financial Bills.

Money Bill

• A Money Bill is a Bill which contains only provisions dealing with all or any of the matters detailed in Article 110(1) of the Constitution. 

The matters detailed in that clause are:

a) The imposition, abolition, remission, alteration or regulation of any tax.

b) the regulation of the borrowing of money or the giving of any guarantee by the government of India, or the amendment of the law with respect

to any financial obligations undertaken or to be undertaken by the government.

c) The custody of the Consolidated Fund or the Contingency Fund of India, the payment of moneys into or the withdrawal of moneys from any such Fund.

d) The appropriation of moneys out of the Consolidated Fund of India.

e) The declaring of any expenditure to be expenditure charged on the Consolidated Fund of India or the increasing of the amount of any such expenditure.

f) The receipt of money on account of the Consolidated Fund of India or the public account of India or the custody or issue of such money or the audit of the accounts of the Union or of a State.

• A Bill, however, cannot be deemed to be a Money Bill by reason only that it provides for the imposition of fines or other pecuniary penalties or for the demand or payment of fees for services rendered or by reason that it provides for the imposition, abolition, remission, alteration or regulation of any tax by any local authority or body for local purposes.

• On the question whether a Bill is a Money Bill or not, the decision of the Speaker is final. In every case of a Money Bill, he endorses a certificate thereon signed by him to the effect that it is a Money Bill before the Bill is sent to Rajya Sabha or presented to the President for assent.

• A Money Bill is returned to Lok Sabha with the message that Rajya Sabha has no recommendations to make to the House in regard to the Bill or with the message intimating to Lok Sabha the amendments so recommended, as the case may be. Lok Sabha, under article 109, has the option to accept or reject all or any of the recommendations made by Rajya Sabha. 

• The Bill, however, has to be returned within a period of 14 days from the date of its receipt by Rajya Sabha, otherwise it is deemed to have been passed by both Houses at the expiration of the said period in the form in which it was passed by Lok Sabha.

Financial Bills

Financial Bills, other than Money Bills, are covered under Article 117. 

They may be divided into two categories:

i) Those which make provision for any of the matters which come within the definition of a Money Bill but do not consist solely of these matters.

ii) Those which, if enacted, and brought into operation, would involve expenditure from the Consolidated Fund of India. 

• Bills of the former category come under Article 117(1), and Bills of the latter category under Article 117(3). 

• A Financial Bill coming under the purview of under Article 117(1) can be introduced only in Lok Sabha and it requires the recommendation of the President for its introduction. 

• A Financial Bill coming under the purview of Article 117(3) may be introduced in either House and it does not require the recommendation of the President for its introduction. It cannot, however, be passed by either House unless the President has recommended to that House the consideration thereof. 

• But not being a Money Bill, Rajya Sabha has full power to reject or amend such a Bill as in the case of ordinary Bills.

(The author is a trainer for Civil Services aspirants.)