The Taxation and Other Laws (Amendment) Bill, 2026 has been introduced in the Lok Sabha today. The Bill brings major reforms across manufacturing, data-centre operations, mining, business trusts and global fund management. It extends key exemptions, eases compliance rules and strengthens India’s aim to attract high-value foreign investment. The CBDT has issued a comprehensive FAQ document on the Bill accessible on X.
The Taxation and Other Laws Amendment Bill, 2026 introduces a series of targeted reforms aimed at boosting manufacturing, strengthening India’s digital infrastructure, and improving tax certainty for global investors.
The first major change extends the tax exemption for foreign companies that provide capital goods, equipment or tooling to Indian contract manufacturers. Earlier, this exemption was available only till the 2030-31 tax year. The Bill now extends it by another 10 years, up to 2040-41. It also clearly defines what qualifies as “specified electronic goods,” including mobile phones, laptops, servers, tablets, and related sub-assemblies.
The second set of amendments deals with foreign companies procuring data‑centre services from India. Currently, these companies enjoy tax exemption if they use a specified data centre. The Bill removes the requirement for government notification of both the foreign company and the data centre, making the process simpler. It also allows Indian companies to operate data centres on a leased model, instead of owning them outright.
Next, the Bill introduces a new exemption for foreign mining companies selling rough diamonds in India’s Special Notified Zones in Mumbai and Surat. This exemption will be available for 15 years, until 2041, and applies to miners, sightholders, brokers and auction entities.
Another new provision grants tax exemption to foreign companies storing components in custom-bonded warehouses for sale to Indian contract manufacturers producing specified electronic goods. This exemption also runs for 15 years.
The Bill further provides relief to unit holders of business trusts. Earlier, dividends were exempt only if the underlying special-purpose vehicle was in the old tax regime. The amendment now extends this exemption even when the SPV shifts to the new regime. To balance revenue, a 15% surcharge will apply on such SPVs.
Finally, the Bill simplifies conditions for foreign investment funds whose managers relocate to India. The number of qualifying conditions is reduced from 13 to just 5, making it easier for global funds to operate from India without creating a taxable business connection.
Overall, the Amendment Bill aims to improve ease of doing business, attract high-value global investment, and strengthen India’s position in electronics manufacturing, cloud services, mining trade and fund management.
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