The Taxation and Other Laws (Amendment) Bill, 2026 is passed in Lok Sabha with the objective of mitigating economic shocks, supporting key sectors, and providing tax relief measures. The bill exempts foreign institutional investors and BIS from paying income tax on interest earned on investments in government securities.
The Taxation and Other Laws (Amendment) Bill, 2026 was moved by Finance Minister Nirmala Sitharaman for consideration and passing in Lok Sabha today. The bill aims to amend the Payment and Settlement Systems Act, 2007, the Income-tax Act, 2025, and the Finance Act, 2026 with the intention of providing tax relief measures to support the economy and boost foreign investment.
The bill replaces the Income-tax (Amendment) Ordinance, 2026, which was promulgated on 5th June this year. The Ordinance was issued with an objective of mitigating the impact of external economic shocks, ensuring stability in the domestic economy, and supporting key sectors affected by prevailing global conditions.
Notably, the bill also exempts foreign institutional investors and the Bank for International Settlements from paying income tax on interest earned on investments in government securities. The exemption will apply to income arising on or after 1st April this year. Previously, under the Income-tax Act, interest income was taxed at 20 per cent, short-term capital gains at 30 per cent and long-term capital gains at 12.5 per cent.
The Bill further amends the Income-tax Act to exempt income earned by certain foreign companies from the sale of rough diamonds in a notified special zone.
Source:
Akashvani News
