Lok Sabha passes Finance Bill 2015

The Lok Sabha recently passed the Finance Bill 2015 through voice vote.

The Bill contains the government’s tax proposals for the fiscal FY16.

  • The Bill was passed after the Finance Minister moved as many as 41 official amendments.
  • The amendments include slew of tax concessions to foreign companies on the Minimum Alternate Tax (MAT) front, exempting the sponsors/promoters of real estate investment trusts from MAT on the notional gains arising from shares of a special purpose vehicle to a business trust in exchange of units allotted by that trust.
  • The biggest relief to foreign companies is that they will not henceforth be subjected to MAT on any interest, royalty or fees for technical services.
  • This would mean that incomes earned by foreign companies (including foreign institutional investors) on investments in Government and other fixed income securities will not be covered under MAT provisions.

What is Finance Bill?

  • The Finance Bill which deals with the taxation measures proposed by Government is introduced immediately after the presentation of Budget.
  • It is accompanied by a memorandum explaining the provisions of the Bill and their effect on the finances of the country.
  • The government proposals for the levy of new taxes, alterations in the present tax structure or continuance of the current tax structure beyond the period approved by Parliament, are laid down before Parliament in this bill.
  • The Parliament approves the Finance Bill for a period of one year at a time, which becomes the Finance Act.
  • Finance Bill is taken up for consideration and passing after the Appropriation Bill is passed.
  • Parliament has to pass the Finance Bill within 75 days of its introduction.
  • As the Finance Bill contains taxation proposals, it is considered and passed by the Lok Sabha only after the Demands for Grants have been voted and the total expenditure is known.
  • The procedure in respect of Finance Bill is the same as in the case of other Money Bills.

Sources: The Hindu, rajyasabha.nic.in.

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