Finance Minister Nirmala Sitharaman is slated to move the two bills for consideration and passing in the House.
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The ‘Taxation and Other Laws (Amendment) Bill, 2026 ‘ seeks to amend the Payment and Settlement Systems Act, 2007, Income-tax Act, 2025, and Finance Act, 2026.
The bill proposes a series of tax changes aimed at boosting investment, supporting manufacturing, providing tax certainty and will replace the Income-tax (Amendment) Ordinance, 2026.
The bill was brought against the backdrop of evolving geopolitical developments and disruptions in global trade and supply chains.
The government has said the amendments are intended to mitigate external economic shocks, ensure domestic economic stability and support sectors affected by prevailing global conditions while also providing greater ease of doing business and tax certainty. One of the key taxation proposals in the Bill is the rationalisation of the conditions governing eligible offshore investment funds and eligible fund managers.The Bill proposes to simplify the framework of the Income-tax Act, 2025 by reducing compliance conditions while retaining core safeguards, with the objective of promoting fund management activity in India and providing greater tax certainty for global investors.The Bill also proposes to extend tax incentives for electronics manufacturing.
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It seeks to extend the tax exemption available to foreign companies supplying capital goods, equipment or tooling to Indian contract manufacturers for specified electronic goods until the tax year ending March 31, 2041, instead of the earlier sunset of 2030-31.
It also expands the definition of specified electronic goods to include products such as laptops, tablets, servers, hearables, wearables and related accessories.Another significant proposal in the bill is the introduction of fresh tax exemptions for foreign investors in government securities. The Bill proposes to exempt interest income as well as capital gains arising from the sale, exchange or transfer of government securities for Foreign Institutional Investors (FIIs) and the Bank for International Settlements, subject to prescribed reporting requirements.
To strengthen India’s position in the global diamond trade, the Bill proposes a tax exemption until March 31, 2041 for income earned by eligible foreign diamond mining companies, sight holders, brokers, aggregators and auction entities from the sale of rough diamonds conducted through notified special zones.
For business trusts, the Bill proposes to remove an existing restriction that denied tax exemption on dividends received by unit holders where the special purpose vehicle (SPV) had opted for the new tax regime.Apart from tax changes, the Bill also proposes to amend the Payment and Settlement Systems Act, 2007 by removing references to the Income-tax Act in provisions relating to electronic payment modes.
It empowers the Central Government to notify electronic payment modes on which banks or system providers cannot levy charges.
The Bankers’ Books Evidence Bill seeks to modernise the legal framework governing the admissibility of bank records as evidence and align it with contemporary digital banking practices.
The Bill seeks to replace the existing legal framework with provisions that recognise the growing use of electronic and digital records in the banking sector. It provides that an electronic or digital record of a banker’s book will be admissible, valid and legally enforceable as evidence, subject to the conditions prescribed under the legislation.
The proposed law expands the definition of “bankers’ books” to cover records maintained by banks in physical, electronic, digital, virtual and cloud-based forms, as well as records stored through other electronic systems.
This is intended to provide a technology-neutral and future-ready legal framework covering the different ways in which banking records are now created, stored and maintained.
The Bill also seeks to standardise the certification process for producing bank records as evidence in legal proceedings. It further empowers the Central Government to prescribe additional certification conditions and extend the applicability of the law to entities carrying on the business of banking through notification.
The legislation seeks to address limitations in the Bankers’ Books Evidence Act, 1891, which was enacted when banking records were predominantly maintained in physical form.
Under the existing framework, certified copies of bank records can be used as evidence in legal proceedings without requiring the original records to be produced.According to the Statement of Objects and Reasons, technological advancements and the growth of digital banking have significantly changed how bank records are created, stored and maintained, making it necessary to strengthen and modernise the legal framework.
The Bill aims to ensure that banking evidence law keeps pace with technological developments while maintaining the authenticity and reliability of records produced before courts and other authorities. It provides a legal framework for the admissibility and certification of bank records in an increasingly digital banking environment.
The two Bills were passed in Lok Sabha by voice vote without discussion amid protests by opposition members over their demands related to police action against protestors in the national capital on July 20.
