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Taxation Amendment Bill 2026: UPI MDR Return, FDI Incentives Proposed

Taxation Amendment Bill 2026: UPI MDR Return, FDI Incentives Proposed
Lok Sabha To Take Up Taxation Amendment Bill 2026 Today: UPI MDR Return, FDI Incentives Proposed · freepressjournal.in

The Indian government collects money from people and companies through rules called taxes.

A group of elected leaders called the Lok Sabha is now looking at a very big new bill about taxes.

The Finance Minister, Nirmala Sitharaman, introduced the bill on August 4.

One proposed change could let banks charge shops a small fee when customers pay using UPI, a fast phone payment system that currently has no such fee.

The bill also wants to give tax breaks to foreign investors who buy Indian government securities.

It hopes to help companies that make electronics like phones, laptops and tablets by keeping their tax benefits for many years.

Diamond companies and real estate investment trusts would also get tax help under the plan.

Experts say this could be one of the most significant changes to India's taxation laws.

If it passes, the bill will replace an earlier tax ordinance and change several existing laws.

Five other bills were already passed by the Lok Sabha during the current Monsoon Session, and some are waiting for the Rajya Sabha to consider them.

Key facts

Bill
Taxation and Other Laws (Amendment) Bill, 2026
Introduced by
Finance Minister Nirmala Sitharaman
Introduced on
Tuesday, August 4, 2026
Key proposal
Removal of zero Merchant Discount Rate (MDR) provision under Section 10A of the Payment and Settlement Systems Act, 2007
Laws to be amended
Payment and Settlement Systems Act, 2007; Income-tax Act, 2025; Finance Act, 2027
Replaces
Income-tax (Amendment) Ordinance, 2026
Contract manufacturing tax exemption
Extended until financial year 2041
Rough diamond tax exemption
Extended until March 31, 2041

Sources

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