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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.

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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.

What is MAT?

The concept of Minimum Alternate Tax (MAT) was introduced in the direct tax system to make sure that companies having large profits and declaring substantial dividends to shareholders but who were not contributing to the government by way of corporate tax, by taking advantage of the various incentives and exemptions provided in the Income-tax Act, pay a fixed percentage of book profit as minimum alternate tax.

The objective of introduction of MAT is to bring into the tax net “zero tax companies” which in spite of having earned substantial book profits and having paid handsome dividends, do not pay any tax due to various tax concessions and incentives provided under the Income-tax Law