The Finance Act is enacted to give effect to the financial proposals of the Central Government for a given financial year.1 During the Budget presentation each year, the Government puts before the Parliament its proposed plans for the country and the expenditure to be accrued for achieving them. After they are debated and passed by the Parliament, the Finance Act is enacted by assent of the President. It gives legal sanction to the expenditure that the government may make. This process begins in February, during the Budget Session of the Parliament.
The First Schedule of a Finance Act has four parts and contains the following information for that financial year:
- Part I: Income tax rates and surcharges on income tax
- Part II: Rates of TDS
- Part III: TDS on income from ‘salaries’
- Part IV: rules for calculating net agricultural income
- Rule 219, Rules of Procedure of the Lok Sabha, 2014