Finance Minister Nirmala Sitharaman is likely to introduce the Taxation and Other Amendment Bill, 2026, in the Lok Sabha either on Monday or Tuesday, sources told NDTV Profit.
The proposed legislation is expected to replace the Income-tax (Amendment) Ordinance, 2026, and introduce several tax and digital payments-related changes announced by the government.
One of the key provisions of the Bill will be to give legislative backing to the ordinance that exempted eligible foreign investors from income tax on investments in government securities (G-secs). The move is aimed at making India's sovereign debt market more attractive to overseas investors and improving foreign participation.
The government is also expected to propose amendments to the Payment and Settlement Systems Act as part of the legislation. According to sources, the changes could impact Centre-notified digital payment modes, including provisions related to the levy of charges on digital payment transactions.
In another significant proposal, the Bill is likely to extend the tax exemption available to foreign companies supplying capital goods to contract manufacturers in India beyond the current five-year period. The tax benefit was originally introduced in the Union Budget 2026 to encourage global manufacturers to strengthen their presence in India's manufacturing ecosystem without creating a permanent establishment tax liability.
The legislation is also expected to include tax relaxations for leased data centres operated by Indian companies, in line with the government's efforts to promote digital infrastructure and attract investments into the data centre sector. The proposed amendments are part of the government's broader strategy to improve India's investment climate, support manufacturing, strengthen digital payments and provide greater tax certainty for foreign investors.
The Bill is expected to be taken up for consideration in the Lok Sabha later this week, subject to the House's legislative agenda.
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