Taxation and Other Laws (Amendment) Bill, 2026

On 6th August 2026, the Lok Sabha passed the Taxation and Other Laws (Amendment) Bill, 2026 to simplify tax provisions, attract foreign investment, promote manufacturing and strengthen India's financial ecosystem.

Key Points

UPI and RuPay: The Bill removes the legal provision that prohibited the levy of Merchant Discount Rate (MDR) on UPI and RuPay debit card transactions. However, it does not impose any MDR; any future levy will require a separate government notification.
Foreign Fund Managers: The Bill eases tax rules for foreign fund managers relocating to India, reducing the risk of foreign investment funds becoming taxable in India.
REITs and InvITs: The tax-exempt status of dividend income from REITs and InvITs has been retained even if the underlying companies shift to the new tax regime.
Electronics Manufacturing: Tax incentives for foreign companies supplying machinery to electronics manufacturing units in India have been extended by ten years to encourage investment.
Other Tax Incentives: The Bill also provides tax exemptions for foreign diamond trading activities and cloud service providers operating data centres in India.