He was the only Government TD to vote against the bill, despite disquiet among backbenchers.
However, so far he has refused to step aside as party chairman.
Meanwhile, there were no Government defections on the legislation introducing the controversial property tax despite criticism by coalition backbenchers of the Bill.
The Government had a comfortable 79 to 44 victory on the introductory or second stage of the Finance (Local Property Tax) Bill.
Around 100 people had gathered outside the gates of Leinster House to protest against the property tax.
While most Government TDs voiced their support inside the Dail for the measure, Fine Gael's Olivia Mitchell was critical, describing it as anti-urban.
She said it was a "gross injustice to the people of Dublin, and to a lesser extent to people in other urban areas. It is an injustice because its method of calculation is based solely on the value of the property", she said.
On the issue of Mr Keaveney, Labour Party leader Eamon Gilmore has said he did not think it was tenable for someone who was not in the parliamentary party to hold senior office in the party.
Party colleague Joanna Tuffy said she hoped that "Colm would consider what's in the best interest of the party right now, and I know he has the best interest of the party at heart".
She added that while she had a lot of admiration for him, she thought that it would be in the best interest of the party, if he considered stepping aside from his role as chairman while he is outside the whip.
Mr Keaveney was the only Government TD to vote against the Budget, despite days of disquiet among backbenchers.
His decision to defy the party leadership has thrown Labour into turmoil.
However, Mr Keaveney yesterday reiterated his intention to stay on in the role.
The Galway East TD defended his desire to stay on as chair, saying: "The graceful thing to do is to honour the mandate I was given by the grass roots of the Labour party and I said I would honour Labour values."
Despite the ongoing fall-out, locals in Tuam have voiced their wholehearted support for the embattled TD.
Mum-of-two Denise Henry from Tuam said he had gained her complete support and her vote.
"I think he's dead right. He has the full support of everyone in Tuam, everyone is talking about it and backing him."
Niall Murphy (34) from Turloughmore, said: "I'd be disgusted if they [the Labour party] removed him. He stuck to his guns and they should accept that. It wouldn't be fair if he has to go."