This article is written by Gautam Badlani, a student of Chanakya National Law University, Patna. This article examines the provisions and judicial decisions relating to money bills in India. Money bills have been envisaged under Article 110 of the Indian Constitution and the Lok Sabha enjoys exclusive powers with respect to these bills. 

It has been published by Rachit Garg.


In India, the general rule is that a new law is promulgated when a bill is passed by both the Houses of Parliament. There are three types of bills: ordinary bills (Article 107), Financial bills (Article 117) and money bills (Article 109 & 110). 

Download Now

The money bill is an exception to the general rule of mandatory approval of both Houses of Parliament. India adopted the concept of money bill from the British. In the United Kingdom, it was the Parliament Act, 1911 that conferred exclusive powers on the House of Commons and deprived the House of Lords of the authority to reject money bills. 

What is a Money Bill 

A money bill relates to matters which are financial in nature, such as taxation matters, bills related to public expenditure, financial obligations of the government or expenditure out of the Consolidated Fund of India.

A money bill is a type of financial bill. There are three types of financial bills:

  • money bills
  • Category I of Finance Bills, i.e., Financial Bills as envisaged under Article 117(1). These bills contain provisions provided under Article 110(1)(a) to 110(1)(f). These bills have the features of both a money bill and an ordinary bill. This bill can also be placed before a Joint Committee of both the Houses. 
  • Financial Bills as envisaged under Article 117(3). These bills are primarily in the nature of ordinary bills with the only difference being that once passed, they involve consolidated fund expenditure. These bills can be introduced in either House of Parliament upon the recommendation of the President.

There are the following types of money bills: 

  • Financial Bill: It is a bill introduced in the Lower House every year, soon after the general budget and deals with financial affairs such as amendments to tax related laws. It is placed before the Parliament at the time of presenting the Annual Financial Statement.
  • Appropriation Bill: This bill authorises appropriation to the relevant grants from the Consolidated Fund. Once a grant is authorised by the House, this bill authorises the expenditure and funds required to meet the grant. 

When is a bill considered to be a money bill

Article 110 of the Constitution envisages a money bill. It provides that a money bill is a bill relating to the following matters:

  1. Taxation
  2. Financial obligations or borrowings of the government
  3. Matters related to Contingency Fund or Consolidated Fund of India 
  4. The Audit of the Union or any of the State’s accounts

However, a bill cannot be considered to be a money bill merely because it deals with: 

  1. The imposition of pecuniary fines or penalties, 
  2. The imposition, remission, or alteration of tax for any local objective or by any local officer or the payment 
  3. The levying of any licence fees 

Article 199 defines a money bill with respect to the State Legislature.

It is pertinent to note that Constitutional Amendment Bills, even if they fulfil the criterion provided by Article 110, do not constitute money bills. Such bills are dealt with under Article 368 and it has an overriding effect on Article 110.

Money Bill provisions in India 

From the above classification, it can be reasonably believed that certain disputes with regard to a bill being a money bill or not are bound to arise. Envisaging such a dispute, Article 110(3) provides that the decision of the Speaker shall be final when there is a question with regards to whether any particular bill is a money bill or not. The speaker is not required to consult anyone in deciding whether a bill is a money bill or not. This provision is taken from Article 22 of the Constitution of Ireland, 1937 which provides that the decision of the Chairman of the Lower House of Ireland shall be final in the case of a money bill. 

Thus, Article 110(4) provides that an endorsement by the Speaker indicating that the bill is a money bill is essential when it is presented before the Rajya Sabha and the President of India for his assent to the bill.

Since absolute powers are vested in the Lok Sabha, there is no possibility of a Joint Committee. Thus, the provisions of joint sitting, as provided under Article 108, do not operate in respect of a money bill.

In the United Kingdom, the decision of the Speaker regarding a money bill cannot be subjected to judicial review. However, Article 110 does not provide any such immunity to the Speaker’s decision.

Stages of passing a money bill in the Parliament 

It is pertinent to note that a money bill, unlike other bills, can only be introduced in the Lower House, that is, the Lok Sabha and not the Rajya Sabha. Article 109(1) expressly forbids a money bill from being introduced in the Rajya Sabha. Furthermore, a money bill is introduced only on the recommendation of the President. 

Article 109 provides the special procedure that needs to be followed for the passing of money bills. The money bill, after being passed by the Lok Sabha, is presented before the Upper House and the Rajya Sabha transmits its recommendations on the concerned bill back to the Lok Sabha within 14 days of its receipt. However, it is the discretion of the Lok Sabha to accept the recommendations in whole or in part. Moreover, if the Council of States fails to transmit the money bill within the 14-day time period, the bill will be deemed to have been passed by both the Houses. 

Similarly, money bills enjoy a special passing procedure in the state legislatures as well. A money bill cannot be introduced, by virtue of Article 198, in the State Legislature. The money bill, upon being passed by the State Legislative Assembly, is sent to the Legislative Council, and the Council has 14 days to make the recommendations and send the bill back to the Legislative Assembly, failing which, the bill will be deemed to have been passed by both Houses. The recommendations of the Council are suggestive and not mandatory.

Controversies around a Money Bill 

The provision of money bills and the exclusive power that it confers on the Lok Sabha has given rise to many controversies. 

  1. The Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits, and Services) Bill, 2016 was introduced as a money bill in the Parliament. The Rajya Sabha made certain recommendations which were rejected by the Lower House. In the landmark judgement of KS Puttaswamy v Union of India(2018), the question that came before the Court was whether the Aadhar Bill was lawfully passed as a money bill or not.

The Aadhar Bill had been introduced as a money bill merely because one of the 59 Sections of the bill, namely Section 7, was concerned with the Consolidated Fund.

The Court, by a majority, held that the bill was indeed a money bill as it was directly and substantially connected with expenses borne out of the Consolidated Fund.

The dissenting judge, Justice Chandrachud, was of the opinion that the Aadhar Bill, being concerned with unique identification, was certainly not a money bill. He further highlighted the importance of the Rajya Sabha in keeping a check on the arbitrary exercise of powers by the Lower House. 

  1. Another controversy arose when the Finance Bill, 2017 was introduced as a money bill.The Finance Act, 2017 amended several statutes and provided for the merger or integration of certain tribunals. 

In Rojer Mathew v. South Indian Bank Limited,(2019), the question came before the Supreme Court whether the Finance Bill, 2017 was, in accordance with Article 110, a money bill or not. 

The Court held that the existing precedents did not provide clarity on the essential characteristics of a money bill and the validity of the Speaker’s endorsement and hence referred the question to a larger bench. 

It was further held that the judicial review of the Speaker’s decisions as to whether a Bill is a money bill or not is maintainable on “limited grounds“. However, the Court, while relying on the judgement of Mafatlal Industries Ltd. v. Union of India(1996), noted that the power of judicial review of the Speaker’s decision should be exercised restrictively and preference was shown towards the concept of “regulatory deference,” which is followed in the United States. 

There have been various other landmark judgments relating to the money bill. These cases are:

  1. L Ponnammal v Union of India(2022): In this case, the petitioner contended before the Madras High Court that Sections 128 to 146 of the Finance Act, 2021 were in contravention of Article 110 of the Constitution. The petitioner pleaded that while the provisions were introduced in Parliament as a money bill, the amendment did not fall under the ambit of Article 110. The petitioner further challenged the IPO of the Life Insurance Corporation (LIC) as well. 

The respondents, on the other hand, pleaded that the Court must respect and save the Speaker’s wisdom unless it is blatantly in violation of the spirit of the Constitution. 

The Court held that the amendmnet’s primary objective was to receive funds in the Consolidated Fund of India. This fund was to be used for development purposes, and hence the amendment was within the ambit of Article 110. Thus, the High Court dismissed the petition.

  1. Corpn. of Calcutta v. Liberty Cinema(1964): In this case, the Court held that “all municipal taxation” is not covered within the definition of money bill as provided by Article 110. It was further noted that licence fees which are excluded by this definition are those which are imposed to meet the regulation and supervision costs of an activity controlled by a licence and its terms. 
  2. Mohd. Saeed Siddiqui v. State of U.P.(2014): In this case, the speaker’s decision to certify the U.P. Lokayukta and Up-Lokayuktas (Amendment) Act, 2012 as a money bill was challenged before the Supreme Court. However, the Court held that such questions could only be raised by a member before the Legislative Assembly. The Court relied on Article 212 and 255 to hold that the Court shall not interfere in the Speaker’s decision and, thus, dismissed the petition. 

Difference between a Money Bill and Financial Bill 

Money BillsFinancial Bills
Money bills are dealt with under Article 110 of the Constitution of India. Financial Bills are dealt with under Article 117 of the Constitution of India. 
The Speaker has the authority to decide whether a Bill is a money bill or not.The Financial Bills do not need endorsement by the Speaker.
All money bills are essentially Financial Bills in nature. All Financial Bills cannot be regarded to be money bills.
Money bills cannot be rejected by the Rajya Sabha. Furthermore, the Council of States the recommendations of the Rajya Sabha with respect to a money bill are not mandatory.The Rajya Sabha is empowered to make changes or even reject a Financial Bill. 
The President shall either give or refuse his assent to a money bill.The President may also recommend reconsideration of the Financial Bill and send it back to the House. 
There is no possibility of the joint sitting of the two Houses of Parliament.The President may order a joint sitting in the event of a deadlock.

It is pertinent to note that there are certain similarities too between a money bill and Financial Bill. Both of them can only be introduced on the recommendation of the President. Furthermore, they can only be introduced before the Lok Sabha.


It is due to the special nature of the subject matter of the money bills that separate Constitutional procedures have been established for the passage of money bills through the Parliament and special privileges have been vested on the House of the elected representatives of the people. 

Thus, we see that the provisions of the money bill have been incorporated to ensure that the Rajya Sabha is not able to block access of the Lower House to the exchequer. 

Frequently Asked Questions (FAQs) 

Q- What is a money bill?

Answer: A money bill, as defined under Article 110, is a Bill relating to taxation, public expenditure, etc. It is a type of Financial Bill.

Q- Where can a money bill be introduced?

Answer: A money bill can be introduced only in the Lok Sabha

Q– Can the Speaker’s decision with respect to a money bill be subject to judicial review? 

Answer: Yes, the decision of the Speaker can be subjected to judicial review. However, such power is to be exercised restrictively and on limited grounds. 

Q- Can Rajya Sabha recommend changes to money bills?

Answer: Yes, the Rajya Sabha can recommend changes to the money bill. However, it is the discretion of the Lok Sabha whether to accept the recommendations or not

Q- Which committee made recommendations with respect to the Money Bill in the Constituent Assembly?

Answer: Expert Committee on Financial Provisions

Q- How is the money bill under the Indian Law different from the British system?

Answer: In the United Kingdom, the Speaker of the House has the absolute authority of determining whether a Bill is a money bill or not and his decision cannot be subjected to judicial review. On the other hand, the Speaker enjoys no such absolute authority in India.

Q- How does the concept of money bill in India differ from that in Australia?

Answer: In India, money bills are expressly dealt with under Article 110 of the Constitution whereas in Australia there is no mention of the expression “money bills”.  §53 of the Commonwealth of Australia Constitution Act, 1900 simply provides that a Bill concerning taxation and appropriation of revenue can only be introduced in the Lower House.

Secondly, the proceedings relating to money bills are held to be internal affairs of the legislature which is beyond the scope of judicial review. In India, the proceedings can be subjected to judicial review.

Q- What are the provisions relating to the money bill in Canada?

Answer: In Canada, the expression “money bill” has not been used in the Canadian Constitution Act, 1867. §53 of the Constitution provides that a bill concerning taxation and appropriation of revenues can be introduction and passed in the House of Commons of the Governor General’s recommendation


Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skills.

LawSikho has created a telegram group for exchanging legal knowledge, referrals, and various opportunities. You can click on this link and join:

Follow us on Instagram and subscribe to our YouTube channel for more amazing legal content.


Please enter your comment!
Please enter your name here