Does Party III of current Finance act becomes Part I of next years Finance Act?

Yes, that is correct. In the structure of the First Schedule to an annual Finance Act in India, the parts are designed to maintain continuity across financial years.

How the Structure Works

The First Schedule is generally divided into distinct parts to manage tax rates for different purposes and periods:

• Part I: Specifies the income-tax rates for the current assessment year. These are the rates at which income is assessed during the current year.

• Part II: Specifies the rates for Tax Deducted at Source (TDS) (other than on "Salaries") for the current financial year.

• Part III: Specifies the rates of TDS on "Salaries" and the rates for advance tax for the current financial year.

The Continuity Rule

Because Part III of the current Finance Act covers rates for advance tax and TDS on salaries for the ongoing financial year, these rates become the basis for the next assessment year. Consequently, when the next year’s Finance Act is enacted, those specific rates—which were in Part III of the previous year's Act—are incorporated into Part I of the new Finance Act to serve as the tax rates for that new assessment year.

This mechanism ensures that there is a clear, continuous transition of tax rates from one financial and assessment year to the next.

Summary: Yes, Part III of a Finance Act (which sets advance tax and TDS on salary rates for the current year) effectively transitions into Part I of the subsequent year's Finance Act, which then serves as the governing tax rate schedule for that year's assessments.