THE TAXATION AND OTHER LAWS (AMENDMENT) BILL 2026

* UNION FINANCE MINISTER NIRMALA SITHARAMAN INTRODUCED THE TAXATION AND OTHER LAWS ( AMENDMENT) BILL 2026 ON 4TH AUGUST 2026. 

* THE BILL SEEKS TO REPEAL AND REPLACE THE INCOME TAX ( AMENDMENT) ORDINANCE 2026 ( ISSUED ON 5TH JUNE 2026) 

* The Ordinance Amended The Income Tax 2025 To Provide Exemption To Certain Foreign Investors In Government Securities. 

* The Bill Further Amends The 2025 Act To Provide Exemption To Certain Other Entities 

(a) Finance Act 2026 

(b) Payment & Settlement System Act 2007 

(*) The Bill Exempts Foreign Institutional Investors (FIIs) And The 

(*) The Bank For International Settlement ( BIS) For Paying Income Tax 

(a) Interest Earned On Investment In Government Securities 

(b) Capital Gains Arising From Sale Exchange Or Transfer Of Such Securities 

* This Was Apply After April 2026 

* Previously Under The Income Tax Act Interest Income Was Taxed At 20%, Short Term Capital Gain At 30% And Long Term Capital Gain At 12.5% 

* This Bill Amends The Income Tax Act To Give Tax Exemption To Certain Foreign Companies 

(a) Income From Sale Of Rough Diamonds In a Notified Special Zone Will Be Exempt 

_- This Will Apply To Foreign Companies - 

(a (1)  Engaged In Diamond Mining Or Sight Holders Of Such Companies 

(a2) Broker, Aggregator Or a Tender And Auction Entity Connected With The Sale Of Rough Diamonds 

- This Will Apply To Foreign Companies That Supply Them To a Contract Manufacturer Of Specified Electronic Goods ( Phone, Laptop) 

From October 2026 Till 31st March 2041 

NOTE - 

* The Income Tax Act Specify Condition For Tax Treatment Of Eligible Investment Fund Registered Outside India But Managed From India 

* This Bill Removes Several Conditions - 

(a) A Minimum Of 25 Members 

(b) Maximum 10% Participation In Terms Of a Single Investor 

(c) Minimum Monthly Average Corpus Requirement Of Rs 100 Crores 

(d) Bar On Investing More Than 25% Of The Corpus In a Single Entity 

* The Finance Act 2026 Levies a Surcharge Of 10% Of Income Tax Payable By Every Domestic Company Opting For Concessional Tax Rates. 

* The Income Tax Act Exempts Income Of Specified Foreign Companies Arising By Way Of Procuring Services From Specified Data Centres 

* The Bill Removes The Condition 

(a) The Foreign Company Notified By Central Government 

(b) The Data Centre Be Set Up Under An Approved Scheme And Be Notified In This Regard 

*  Parliament Passes The Bankers Book Evidence Bill 2026 on 10th August 2026