(1) A Nagar Panchayat or a Council at a meeting specially convened for the purpose, two months before the close of the financial year, shall prepare in such form and manner as may be prescribed, a budget showing inter alia the probable receipts and expenditure during the ensuing year and after such revision as may appear requisite it shall pass the budget and such budget shall be submitted to the Director for obtaining approval of the State Government:
     Provided that if the approval is not intimated within one month from the date of the receipt of the budget by the State Government or the receipt of such other information as is called for by the State Government, it shall be taken that the budget is approved.
     (2) The Nagar Panchayat or the Council may, from time to time, revise any estimates of expenditure with the view of providing for any modification which it may deem advisable to make in the appropriation of the amount at its disposal and such revised budget shall be passed in the manner provided in sub-section (1).
     (3) When the budget has been passed, the Nagar Panchayat or the Council shall not incur any expenditure under any of the heads of the budget in excess of the amount sanctioned under that head without making a provision for such excess by a revision of the budget in the manner specified in sub-section (2).