What is the difference between an Act and a rule?
What separates an Act, a rule, and a regulation in Indian law: the Act is passed by the legislature, rules are made by the government under the Act, and regulations are made by a regulator under its parent Act. How each takes effect and where to read it.
In this guide
An Act is primary legislation passed by Parliament or a state legislature and given the President's or Governor's assent. Rules are subordinate legislation made by the government under a power the Act delegates, filling in procedure and detail. Regulations are made by a statutory regulator, such as SEBI or the RBI, under its parent Act. Rules and regulations must stay within the Act; the Act prevails over both.
What is an Act, rule or regulation?
An Act is the law the legislature passes, a rule is the government's detail made under that Act, and a regulation is a regulator's detail made under its parent Act. All three can bind, but they sit in a hierarchy: the Act is primary, and rules and regulations are subordinate to it. The Act always wins where they conflict.
Knowing which one you hold tells you who made it and whether it can be challenged for going beyond its parent law. A rule or regulation that exceeds the Act is void to that extent, but an Act stands on its own.
What is an Act in Indian law?
An Act is primary legislation passed by Parliament or a state legislature and given the President's or Governor's assent. It sets the broad legal framework, such as the Companies Act, 2013 or the Income-tax Act, 1961. An Act carries the full force of law and binds citizens, courts, and authorities.
Because an Act cannot spell out every detail without becoming unworkable, it usually delegates power to make rules and regulations for the detail. That delegation is what gives rules and regulations their authority.
What is a rule under an Act?
A rule is subordinate legislation the government makes under a power the Act delegates to it. Rules fill in procedure, forms, timelines, and detail that the Act leaves to be prescribed, such as the Companies (Appointment and Qualification of Directors) Rules under the Companies Act. A rule must stay within the boundary the Act sets.
If a rule goes beyond the power the Act gives, it is ultra vires the Act and void to that extent. This is why a rule is read together with the enabling section rather than on its own.
Can a rule add a penalty the Act does not carry?
No. A rule cannot create a penalty the parent Act does not authorise. Section 469 of the Companies Act, 2013 lets the Central Government make rules to carry out the Act's provisions, and section 450 sets the residual penalty for contravention. A rule that invented its own punishment outside that framework would be struck down as ultra vires.
Where do rules get their numbering from?
Rules are numbered inside their own statutory instrument, not inside the Act. Rule 4 of the Companies (Audit and Auditors) Rules, 2014 is a different provision from section 4 of the Companies Act, 2013. Cite the instrument name with the rule number, otherwise the reference is ambiguous.
What is a regulation in law?
A regulation is subordinate legislation a statutory regulator makes under the power its parent Act gives it. SEBI makes regulations under the SEBI Act, and the RBI issues regulations and directions under the Reserve Bank of India Act and the Banking Regulation Act. A regulator can make regulations without returning to Parliament for each one.
Like rules, regulations must stay within the parent Act. The SEBI LODR Regulations, for example, draw their force from the SEBI Act, and a regulation that exceeded that Act would not stand.
How do Act, rule and regulation differ?
The three differ by who makes them and where they rank. The table sets them against maker and legal position.
| Instrument | Who makes it | Rank |
|---|---|---|
| Act | Parliament or a state legislature. | Primary legislation. |
| Rule | The government, under the Act. | Subordinate to the Act. |
| Regulation | A statutory regulator, under its Act. | Subordinate to the Act. |
How do I read an Act with rules?
- Start with the Act to find the power and the broad rule.
- Read the rule or regulation for the procedure, form, or threshold the Act left to be prescribed.
- Check the enabling section named in the rule or regulation to confirm it stays within the Act.
- Confirm the effective date and text from the Gazette, since rules and regulations take effect on gazette publication.
Why do rules get misread as Acts?
- Reading a rule without the enabling section and missing that it cannot exceed the Act.
- Treating a regulator's regulation as if it came from Parliament.
- Assuming a rule or regulation can override the Act it is made under.
- Relying on a summary instead of the gazette text for the effective date.
- Confusing a rule made by the government with a regulation made by a regulator.
Where are new rules and regulations published?
A single change can arrive as an Act amendment, a new rule, or a fresh regulation, from different makers on different sites. Complied AI keeps updates from MCA, CBDT, CBIC, RBI, and SEBI in one feed so you can open the source instrument behind a change, see whether it is an Act, rule, or regulation, and read the parent law next to it.
Practical checks
Common questions
What is the difference between an Act and a rule?
An Act is primary legislation passed by the legislature and given assent, setting the broad legal framework. A rule is subordinate legislation the government makes under a power the Act delegates, filling in procedure and detail. A rule cannot go beyond what the Act permits, and if it does it is invalid to that extent.
Who makes regulations?
Regulations are made by a statutory regulator under the power its parent Act gives it. SEBI makes regulations under the SEBI Act, the RBI under the Reserve Bank of India Act and the Banking Regulation Act, and IRDAI under the IRDAI Act. The regulator can make regulations without going back to Parliament for each one.
Can a rule or regulation override an Act?
No. A rule or a regulation is subordinate to the Act it is made under and cannot override it. If a rule or regulation conflicts with the parent Act, the Act prevails and the subordinate provision is void to the extent of the conflict.
How does an Act come into force?
A Bill becomes an Act when it is passed by the legislature and receives the President's assent for a central law or the Governor's assent for a state law. The Act, or specified parts of it, then comes into force on the date it states or on a date the government notifies.
Are rules and regulations published in the Gazette?
Yes. Rules and regulations are subordinate legislation and are published in the Official Gazette to take legal effect. The gazette copy is the authoritative text, which is why the effective date and wording are read from the gazette rather than a summary.
Is a regulation the same as a rule?
A regulation and a rule are both subordinate legislation, but they usually come from different makers. Rules are typically made by the government under an Act, while regulations are made by a statutory regulator under its parent Act. Both must stay within the Act they draw power from.
My compliance note cites rule 4 but I cannot find it in the Companies Act. Where is it?
Rule 4 is not in the Companies Act, 2013 at all. Rules live in a separate statutory instrument made under section 469 of that Act, such as the Companies (Audit and Auditors) Rules, 2014. Search the rule set by its full name, then read the enabling section the instrument names on its first page.
SEBI changed a LODR regulation. Do I have to wait for Parliament to approve it?
No. SEBI amends the LODR Regulations, 2015 under the rule-making power in sections 11 and 30 of the SEBI Act, 1992, and the amendment takes effect on publication in the Official Gazette. Parliament does not vote on each amendment. Regulations made under the SEBI Act are, however, laid before Parliament under section 31 of that Act.
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How this guide was prepared
This guide is published by the Complied AI research desk. Its source list and stated position were checked against the official records shown below on 5 September 2026.
Automation, including AI, may assist research, drafting and structure. It does not replace the official record or amount to an independent professional review. Read our editorial standards and corrections policy.
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