Finance Act (India)

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The Finance Act[1] is an important Act in India and the Central Government, through this Act, gives effect to financial proposals at the beginning of every Financial Year.

The Act applies to all the States and Union Territories of India unless specified otherwise.

Finance Act [2]

Every Financial Year therefore sees a new Finance Act thus making this Act one that renews itself each year. All the Governmental financial policies are included in this Act. The existing policies, new policies, as well as changes made to existing policies are all included here. Every Finance Act is assented by the President of India.

Important Elements of Finance Act [3]

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[4] 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 Women
  • 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.

Direct Taxes [5]

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 [6]

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

among other details.

References

  1. ↑ "FINANCE ACT, 2012". Government of India, Income Tax. Retrieved 2013-03-09. 
  2. ↑ "DOWNLOAD FINANCE ACT 2012 ASSENTED BY THE PRESIDENT ON 28.05.2012". Simple Tax India. 2012-05-28. Retrieved 2013-03-09. 
  3. ↑ "India: The Finance Bill 2012 - Key Changes/Proposals". Mondaq. 2012-11-14. Retrieved 2013-03-09. 
  4. ↑ "Importance Of The Finance Act". Make My Returns. 2013-03-06. Retrieved 2013-03-09. 
  5. ↑ "Income Tax Amendments by Finance Act, 2011". CA Club India. 2011-05-09. Retrieved 2013-03-09. 
  6. ↑ "THE FIRST SCHEDULE". Law Government of India, Income Tax. Retrieved 2013-03-09. 
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