Amendment to Finance Bill 2023

In News

• Recently, the Amended Finance bill 2023 was passed in parliament without discussion.

About:

• In midst of protests by the opposition benches the Upper House returned the Jammu and Kashmir Appropriation Bill and the Finance Bill to the Lok Sabha without any discussion. 
• The Lok Sabha too cleared the bill without any discussion or introductory remarks by the Ministers.

Procedure for Money Bill in the Parliament:

• Article 110 deals with money bills.
• Money bills can be introduced only in Lok Sabha and only after the president’s recommendation. It is a government bill and can be introduced only by a minister.
• When it is passed by the Lok Sabha and transmitted to the Rajya Sabha. RS can’t amend it but only make recommendations or take no action or reject outright; in either case it has to return it within 14 days. The LS can accept or reject the recommendations and then it goes to the president.
• The President can either accept or reject a money bill but cannot return it for reconsideration and there is no provision for joint sitting of both the houses to resolve the deadlock.

 Important Amendments  of The bill :

• The Union Government has scrapped the long-term capital gains treatment (with indexation benefits) for income from debt mutual funds and other schemes that invest upto 35% in equity shares of domestic companies.
  • Previous to the amendment the investments were considered as long-term investments and taxed at 20% with indexation benefits.

•  Enhanced tax benefits to offshore banking units operating in GIFT city, offshore banking units to get 100% deduction on income for 10 years. 
• Tax on royalty or technical fee earned by foreign (non-resident) companies hiked from 10% to 20%. This would increase the cost of Imports in case of lack of bilateral treaty .
• No change in tax on non-par savings insurance products ( ?5 lakh cap remains). 
• No change in taxation REITS/InviTs despite representation (Income from REITS to be taxed as ‘income from other sources’ and not as capital gains). 
• The securities transaction tax (STT) on the sale of options has been increased to ?2,100 on a turnover of ?1 crore against an earlier levy of ?1,700, an increase of 23.5%, while on the sale of futures contracts, STT has been raised to ?12,500 on ?1 crore of turnover against ?10,000 earlier, indicating a 25% hike.

Additional Information: Different types of Bills

• Financial Bills: A Bill that contains some provisions related to taxation and expenditure, and additionally contains provisions related to any other matter is called a Financial Bill. Therefore, if a Bill merely involves expenditure by the government, and addresses other issues, it will be a financial bill.
• Money Bills: 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. Bills that only contain provisions that are incidental to these matters would also be regarded as Money Bills.
• Constitution Amendment Bills: These are Bills which seek to amend the Constitution.
• Ordinary Bills: All other Bills are called ordinary bills

Source:TH