Finance Minister introduces the Taxation and Other Laws (Amendment) Bill, 2026 to attract foreign investment, strengthen electronics manufacturing and support digital infrastructure.
Key Highlights
- Amendment Bill introduced in Lok Sabha.
- Seeks to attract foreign investment.
- Extends tax benefits for electronics manufacturing.
- Simplifies rules for global fund managers.
- Supports AI data centres and digital infrastructure.
Finance Minister Nirmala Sitharaman has introduced the Taxation and Other Laws (Amendment) Bill, 2026 in the Lok Sabha, aiming to improve India’s investment climate and strengthen manufacturing and digital infrastructure.
The Bill proposes easier rules for foreign investment funds by simplifying conditions that determine whether a foreign fund is considered to be doing business in India.
It also extends income tax exemptions until FY2041 for foreign companies supplying machinery, components and tools to electronics contract manufacturers in India.
To strengthen India’s data centre ecosystem, the Bill removes approval requirements for foreign cloud companies using Indian data centres and allows facilities to operate on leased infrastructure.
The legislation also protects investors in REITs and InvITs while encouraging investments in infrastructure and real estate.
Additionally, the Bill proposes amendments to the Payment and Settlement Systems Act by removing legal restrictions related to Merchant Discount Rate (MDR) provisions for certain notified electronic payment modes.
According to the Finance Ministry, the reforms are intended to provide long-term policy certainty, attract global capital and position India as a preferred destination for manufacturing, AI infrastructure and digital investments.
