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Difference between Finance Act and Finance (No. 2) Act

Income Tax is a charge on total income of the previous year of every person. Section 4 of the Income Tax Act, 1961, requires a Central Act to specify the rate (or rates) of income-tax. Finance Act is that Central Act which specifies the rate (or rates) of income-tax for each year. When for any unavoidable reason (for example, the Lok Sabha elections, interim government, etc.) it is not possible to present a full-fledged Finance Bill in Parliament then one Finance Bill is presented and passed by Parliament to act as an interim measure, to attend to emergency and committed expenses of the Government for the next few months, and not the full financial year that follows. This is also known as a Vote on account. In a year when a Vote on account is passed, a subsequent Finance Bill is presented and that when passed it is known as Finance (No. 2) Act. Some examples of Finance (No.2) Acts are as follows:
The Finance (No.2) Act, 1962, the Finance (No.2) Act, 1965, the Finance (No.2) Act, 1967, the Finance (No.2) Act, 1971, the Finance (No.2) Act, 1977, the Finance (No.2) Act, 1980, the Finance (No.2) Act, 1991, the Finance (No.2) Act, 1996, the Finance (No.2) Act, 1998, the Finance (No.2) Act, 2004, the Finance (No.2) Act, 2009, the Finance (No.2) Act, 2014.

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