Budget 2025: What is Finance Bill, Money Bill, Appropriation Bill? Why are they important?

Did you know that there are three specific bills are also introduced along with each set of Budget documents? These three bills—the Finance Bill, the Appropriation Bill and the Money Bill—serve as the legal backbone of an administration's annual financial plan. Each of these bills deals with specific aspects of the Unuon Budget, such as the collection of taxes, spending of money or financial planning. Without these bills, a government cannot execute its Union Budget.

Here is what these bills really mean and how they impact you: 

What is the Finance Bill and why is it important?

This is perhaps the most important of the three. The Finance Bill contains all tax-related proposals in a Union Budget, ranging from changes in income tax slabs, the tax structure, customs and excise duties, surcharges and exemptions to amendments in existing tax laws.

It is this law that gives a central government the authority to collect revenue in the form of taxes as well as to make changes to existing tax laws.

This bill is in the Lok Sabha—the lower house of Parliament—after the finance minister delivers the Budget speech.

Under the law, the Finance Bill must be passed by Parliament within 75 days of its introduction.

What is the Appropriation Bill and why is it important?

It is this particular bill that seeks Parliament's nod for a government's spending plans.

The Appropriation Bill authorises the withdrawal of money from the Consolidated Fund.

The Consolidated Fund is a government account that holds all of the revenue that a government collects.

It is using money from this very account that a government spends money on various schemes and policies.

This bill is introduced after Budget discussions.

What is the Money Bill and why is it important?

A Money Bill contains all the provisions related to taxation, borrowing or expenditure from the Consolidated Fund.

Introduced in the Lok Sabha, the Money Bill needs approval of the Rajya Sabha—the upper house of Parliament—approval within 14 days (though the final decision lies with the Lok Sabha).