Law ยท Statute
The Finance Act, 2006
The annual Act that gave effect to the Union Budget proposals for 2006. Like every Finance Act it amends many other statutes, and it is cited today chiefly for the changes it made to them.
- Kind
- Act
- Year
- 2006
- Administered by
- Ministry of Finance
- Law stated as at
What it does
A Finance Act is passed each year to give legal effect to the Budget. It imposes and varies taxes and duties, and it amends other statutes in the same Bill, so that a single Act can touch direct tax, indirect tax, stamp duty and the law of particular regulators. The Finance Act, 2006 is of that kind. It is read today as a source of amendments, because most of what it enacted has since been folded into the statutes it changed.
Who it binds
It binds those who are bound by the provisions it amended: taxpayers under the taxing statutes it altered, and parties to instruments chargeable with duty under the amended Stamp Act provisions. It does not stand as a separate code that a person can comply with on its own, and the usual way to meet it is through the text of the amended Act.
What has changed, and when
The Act has been overtaken by later Finance Acts of 2025 and 2026, which are related instruments on this site, and by the wider replacement of the Income-tax Act, 1961 by the Income-tax Act, 2025 from 1 April 2026. A reader should be careful to take the text of an Act as amended to the relevant date and not the 2006 amendment in isolation.
What turns on it in practice
The site's note on a power of attorney signed abroad to sell a flat in Bengaluru names the Finance Act, 2006 for a point of stamp law. An instrument executed only outside India may be stamped within three months after it is first received in India. The note relies on section 18 of the Indian Stamp Act, 1899 as amended by the Finance Act, 2006 for the period and the rule, and then applies the equivalent section of the Karnataka Stamp Act, 1957, because the document is stamped in the State where it is used. The practical rule for a non-resident signing an instrument abroad is that the clock runs from the first receipt in the State, and that a document not duly stamped is not admitted in evidence until the duty and any penalty are paid.
The point to take from the page is the method. A reference to the Finance Act, 2006 by name should be traced to the section it amended, the section should be read in its current form, and in a matter of stamp duty the State's Act should be read alongside, since the State law governs the duty on most instruments.
Reference