Taxation Laws Bill to attract more foreign cap, provide policy certainty introduced in LS

Finance Minister Nirmala Sitharaman on Tuesday introduced the Taxation and Other Laws (Amendment) Bill, 2026, in the Lok Sabha to attract more foreign capital and promote domestic manufacturing by providing reliable policy and process certainty.

The Bill proposes to make it easier for fund managers to relocate to India without the foreign fund being treated as doing business in India. It also seeks to extend income tax exemptions available to foreign companies that provide machinery and tools to Indian factories making specified electronic goods under contract manufacturing until 2040-41.

The proposals share a single purpose of making India an attractive and predictable destination for global capital, manufacturing, and business, Finance Ministry sources stated.

Some of the key proposals of the Bill include:

Relief for investors in business trusts: In a relief for investors in business trusts, the Bill proposes that investors in REITs and InvITs continue to receive their dividends tax-free even after the operating company shifts to the new Income Tax regime.

Attracting local fund managers: To attract foreign capital, the Bill proposes to make it easier to bring fund managers to India. 

Data Centres: The Bill proposes clearer, simpler rules for data centres.