New Delhi, August 6: The Lok Sabha passed the Taxation and Other Laws (Amendment) Bill, 2026 by voice vote without discussion on Thursday, paving the way for structural reforms in digital payment frameworks and foreign investment rules.
Introduced by Finance Minister Nirmala Sitharaman, the legislation amends the Payment and Settlement Systems Act, 2007, the Income-tax Act, 2025, and the Finance Act, 2026, while replacing an earlier ordinance issued to protect the domestic economy from global trade shocks.
“The proposed changes aim to provide policy certainty, mitigate external economic disruptions, and strengthen India’s appeal as a global investment hub,” stated Finance Ministry officials regarding the key objectives of the legislation.
A major feature of the Bill gives the Centre authority to notify specific electronic payment modes on which banks and service providers may levy a Merchant Discount Rate, addressing long-standing financial sustainability concerns in the fintech sector. The law also extends tax exemptions for electronics contract manufacturing and rough diamond trading through notified zones until March 31, 2041.
