Finance Act, 2020
A Finance Act is the headline fiscal (budgetary) legislation enacted by the UK Parliament, containing multiple provisions as to taxes, duties, exemptions and reliefs at least once per year, and in particular setting out the principal tax rates for each fiscal year.
The rules governing the various taxation methods are contained within the relevant taxation acts. Capital Gains Tax legislation, for example, is contained within Taxation of Chargeable Gains Act 1992. The Finance Act details amendments to be made to each one of these Acts. The main taxes are Excise Duties, Value Added Tax, Income Tax, Corporation Tax, and Capital Gains Tax.
The Finance Act contains necessary amendments in the direct taxes (e.g. income tax and wealth tax) and indirect taxes (e.g. excise duties, custom duties and service tax) signifying the policy decisions of the Union Government.
Finance Bill is presented usually in the last week of February every year and this bill contains amendments in direct as well as indirect taxes. It is usually presented in the Parliament by the Finance Minister.
The finance bill is passed by both the houses of Parliament after it is being tabled and necessary recommendation / amendments have been made in it. Once this bill has been passed by the Parliament, it goes to the President for his assent. After President’s assent, the finance bill becomes the Finance Act.
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