- Finance Minister Nirmala Sitharaman introduced the Taxation and Other Laws (Amendment) Bill, 2026 in the Lok Sabha.
- The Bill seeks to attract foreign capital by offering greater policy and tax certainty.
- It also proposes extending tax benefits for foreign companies engaged in contract manufacturing of specified electronic goods until 2040-41.
New Delhi: Finance Minister Nirmala Sitharaman on Tuesday introduced the Taxation and Other Laws (Amendment) Bill, 2026 in the Lok Sabha, proposing a series of changes aimed at making India a more attractive destination for global investors and manufacturers. The Bill focuses on simplifying tax provisions, improving regulatory certainty and encouraging long-term investment in the country’s manufacturing sector.
The government said the proposed amendments are intended to provide a stable policy framework while supporting India’s ambition to become a global manufacturing hub.
Taxation and Other Laws Amendment Bill 2026 Focuses on Foreign Investment
One of the key proposals in the Bill is to facilitate the relocation of foreign fund managers to India.
Under the proposed changes, foreign investment funds relocating their fund management operations to India will not be treated as carrying on business in the country solely because their managers are based here. The move is expected to make India a more competitive destination for global asset management firms.
Tax Relief Proposed for Contract Manufacturing
The Bill also proposes extending the income tax exemption available to foreign companies supplying machinery and equipment to Indian factories engaged in contract manufacturing of specified electronic goods.
If approved, the tax benefit will continue until the financial year 2040-41, providing long-term certainty for multinational companies investing in India’s electronics manufacturing sector.
Government Aims to Strengthen Manufacturing Ecosystem
According to the government, the proposed amendments are designed to encourage higher foreign investment, promote domestic manufacturing and create a predictable tax environment for businesses.
The Bill will now be taken up for further discussion and consideration in Parliament before it can become law.
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