Taxation and Other Laws (Amendment) Bill, 2026

Still running. 9 entries so far, over 31 days from 5 August 2026.

01
5 August

Taxation and Other Laws (Amendment) Bill, 2026

The Taxation and Other Laws (Amendment) Bill, 2026 was introduced in the Lok Sabha to facilitate ease of doing business and attract foreign capital.
The Bill amends the Payment and Settlement Systems Act, 2007, the Income-Tax Act, 2025, and the Finance Act, 2026.
Data Centres: The Bill removes government notification and approval requirements for foreign cloud companies using Indian data centres and permits data centres to operate on a leased basis.
Fund Management: The Bill reduces conditions for foreign fund managers relocating to India to prevent the foreign fund from being classified as doing business in India, while maintaining safeguards against money laundering and round-tripping.
REITs and InvITs: The Bill restores tax exemptions for dividends paid by Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) to investors, regardless of whether the operating company follows the old or new tax regime.

02
6 August

Taxation and Other Laws (Amendment) Bill, 2026

The Taxation and Other Laws (Amendment) Bill, 2026 aims to improve the ease of doing business and attract foreign capital.
The Bill proposes amendments to the Payment and Settlement Systems Act, 2007, the Income-Tax Act, 2025, and the Finance Act, 2026.
Data Centres: Proposed removal of government notification and approval requirements for foreign cloud companies using Indian data centres; allows data centres to operate on a leased basis.
Fund Management: Simplification of conditions for foreign fund managers relocating to India to prevent the foreign fund from being taxed as a business entity in India, while maintaining safeguards against money laundering and round-tripping.
REITs and InvITs: Restoration of tax exemption for dividends paid to investors, ensuring the benefit remains regardless of whether the operating company follows the old or new tax regime.

03
7 August

Taxation and other Laws (Amendment) Bill

The Taxation and other Laws (Amendment) Bill, 2026, has been passed by the Lok Sabha.
The Bill aims to promote domestic electronics manufacturing, attract foreign investment, and modify the zero-MDR (Merchant Discount Rate) framework.
It replaces the June 5 Ordinance regarding Income Tax exemptions for Foreign Portfolio Investors (FPIs) on interest income and capital gains from Government Securities (G-Secs).
The legislation seeks to decouple the Payment and Settlement Systems Act from the Income Tax Act.
The Bill provides legal backing for the government to modify the zero-MDR framework for UPI and RuPay transactions, potentially allowing merchant charges on select transactions.

04
9 August

UPI Payment Charges Legislation

The Taxation and Other Laws (Amendment) Bill, 2026, empowers the government to notify specific UPI transactions that may attract Merchant Discount Rate (MDR) charges.
MDR is a fee paid by merchants to banks and payment processors, comprising interchange fees, processing charges, network fees, and GST.
Currently, UPI and RuPay debit card transactions are exempt from MDR under the Payment and Settlement Systems Act, 2007, and Section 269SU of the Income Tax Act, 1961.
Government subsidies for low-value BHIM-UPI transactions (under ₹2,000) have fluctuated, with ₹2,000 crore budgeted for 2026-27 compared to ₹3,631 crore in 2023-24.
Proposed potential MDR structure: 0.25-0.4% charge on transactions exceeding ₹2,000 for merchants with annual turnover above ₹1 crore-1.5 crore.
Government rationale: MDR charges are intended to support infrastructure, innovation, and security investments by banks and fintech entities.

05
11 August

Taxation of UPI transactions

Proposed amendment to Section 10A of the Payment and Settlement Systems Act, 2007, via the Taxation and Other Laws (Amendment) Bill, 2026.
Proposal to introduce a Merchant Discount Rate (MDR) of 0.25–0.5% on UPI transactions exceeding ₹2,000.
Official estimates suggest the threshold covers 5% of UPI transactions by volume but 65% by transaction value.
Historical context: UPI was launched in 2016 with a zero-MDR regime to incentivize the transition from cash to digital payments.
Economic concerns: UPI operates as a two-sided market; tax incidence is uncertain and may lead to cost absorption by banks/PSPs, potentially reducing investment in infrastructure and innovation.
Financial inclusion: UPI has facilitated the formalization of informal transactions and created digital trails useful for credit assessment.
Comparison: Credit card transactions in India currently attract 18% GST on interest and fees, which is higher than typical international standards for consumer credit.

06
11 August

Rajya Sabha legislative business

Rajya Sabha passed the Bankers’ Books Evidence Bill and returned the Taxation and Other Laws (Amendment) Bill.
The Taxation and Other Laws (Amendment) Bill allows the National Payments Corporation of India (NPCI) to finalize the Merchant Discount Rate (MDR) for specific merchant transaction categories.
The Union Finance Ministry clarified that UPI transactions remain free for consumers, and no transaction charges will be levied on them.
The government stated that the vast majority of merchant transactions, including those involving small roadside vendors, will remain free of charges.
A statutory motion was moved in the Rajya Sabha to disapprove an ordinance issued by the Finance Ministry in June.
The legislative process involved the simultaneous discussion of a statutory motion and the corresponding Bill.

07
12 August

Rajya Sabha legislative business and UPI charges

Rajya Sabha passed the Bankers’ Books Evidence Bill and returned the Taxation and Other Laws (Amendment) Bill.
The Taxation and Other Laws (Amendment) Bill, 2026, includes an amendment to Section 10A of the Payment and Settlement Systems Act, 2007.
The amendment empowers the government to notify charges on specified electronic payment modes.
Proposed Merchant Discount Rate (MDR) for UPI transactions above ₹2,000 is 0.25–0.5%.
Government states that while the threshold covers roughly 65% of transaction value, it impacts only 5% of transactions by volume.
Finance Ministry maintains UPI will remain free for consumers, with low-value transactions for small vendors unaffected.
UPI was launched in 2016 with a zero-MDR regime to promote a less-cash economy.
Economic concerns include the potential for MDR to be absorbed by banks/PSPs, potentially reducing investment in service reliability and fraud prevention.
Arguments against the tax highlight its potential to discourage digital adoption and impact financial inclusion goals.

08
16 August

UPI transaction charges and cash usage

The Taxation and Other Laws (Amendment) Bill, 2026, allows the government to levy a Merchant Discount Rate (MDR) on UPI and RuPay debit card transactions.
Cash with the public is defined as total cash in circulation minus cash held by banks.
Growth of cash with the public has increased from 4% in 2023-24 to 12% in 2025-26, reaching 13% growth in 2026-27 (₹41.8 lakh crore as of July 2026).
UPI transaction value growth has slowed from 105% in 2021-22 to 20.3% in 2025-26 and 18.7% as of August 2026.
Despite the slowdown, UPI transaction growth (18.7%) remains higher than the growth of cash with the public (13%).
Experts suggest the simultaneous growth of cash and digital transactions may indicate higher economic activity or potentially understated official inflation data.
Government assurances state that the proposed MDR will not apply to the general public but will target specific high-value transactions.
Concerns exist that merchants may pass MDR costs to consumers, potentially incentivizing a shift back toward cash usage.

09
4 September

Parliamentary panel on Income Tax regime

The Parliamentary Standing Committee on Finance is reviewing 'Direct Tax Reforms: Simplification, Rationalisation and Ease of Compliance'.
Concerns raised regarding the Income Tax regime's reliance on punitive enforcement mechanisms rather than voluntary compliance.
The committee identified compliance-related glitches in the implementation of the Income Tax Act, 2026.
The committee requested data from the CBDT on revenue collections, number of assessees, and pending litigation.
Members noted a trend of increasing contribution from individual income taxpayers relative to corporate tax collections.
Criticism directed at the frequency of tax notices and the impact of frequent or retrospective rule changes on taxpayer ease of compliance.

Questions from this story

Newest first. A story that ran for 31 days is exactly the kind the mains paper asks about as one question.

Discuss the role of Parliamentary Standing Committees in ensuring accountability and transparency in the administration of direct tax reforms in India. 150 words · 4 September
Analyze the challenges in balancing tax enforcement with the objective of 'Ease of Compliance' in the Indian direct tax regime. How can the government address the concerns regarding the widening gap between individual and corporate tax contributions? 250 words · 4 September
Analyze the implications of introducing a Merchant Discount Rate (MDR) on digital payment platforms like UPI for the government's long-term goal of a less-cash economy. 150 words · 16 August
Discuss the correlation between the growth of cash in circulation and digital transaction volumes in the context of India's post-pandemic economic recovery. How do these trends challenge the accuracy of current inflation measurement frameworks? 250 words · 16 August
Discuss the implications of introducing a Merchant Discount Rate (MDR) on digital payment systems for financial inclusion and the formalisation of the economy. 150 words · 12 August
The transition towards a less-cash economy has been a significant policy objective in India. Analyze the challenges associated with taxing digital payment rails and the potential impact of such fiscal measures on the long-term sustainability of digital infrastructure. 250 words · 12 August
Discuss the role of the National Payments Corporation of India (NPCI) in regulating digital payment ecosystems and the significance of the Merchant Discount Rate (MDR) in the context of financial inclusion in India. 150 words · 11 August
Examine the constitutional provisions and parliamentary procedures regarding the passage of Bills and the role of statutory motions in disapproving ordinances. How does the legislative process ensure accountability in the implementation of financial policies? 250 words · 11 August
Discuss the implications of introducing a Merchant Discount Rate (MDR) on UPI transactions for India's digital economy and financial inclusion goals. 150 words · 11 August
The transition from a cash-based economy to a digital payment ecosystem requires a delicate balance between revenue generation and incentivizing adoption. Critically analyze the challenges of taxing two-sided digital payment markets and its potential impact on the long-term sustainability of financial infrastructure in India. 250 words · 11 August
Discuss the rationale behind the proposed introduction of Merchant Discount Rate (MDR) on UPI transactions and its potential impact on the digital payment ecosystem in India. 150 words · 9 August
The sustainability of digital public infrastructure depends on balancing financial inclusion with the operational costs of payment service providers. In light of the proposed amendments to the Payment and Settlement Systems Act, analyze the challenges of transitioning from a zero-MDR regime to a cost-recovery model for UPI. 250 words · 9 August
Discuss the rationale behind the Taxation and other Laws (Amendment) Bill, 2026, in the context of enhancing India's attractiveness for global manufacturing and capital flows. 150 words · 7 August
The proposed decoupling of the Payment and Settlement Systems Act from the Income Tax Act marks a shift in the regulation of digital payments. Analyze the implications of modifying the zero-MDR framework on the digital payments ecosystem in India. 250 words · 7 August
Discuss the significance of the Taxation and Other Laws (Amendment) Bill, 2026 in promoting India as a global hub for data centres and financial fund management. 150 words · 6 August
How do legislative amendments to tax regimes, such as those proposed for REITs, InvITs, and foreign fund management, contribute to the broader objective of enhancing the ease of doing business in India? 250 words · 6 August
Discuss how legislative amendments to taxation laws can serve as a strategic tool for enhancing the 'Ease of Doing Business' and promoting the 'Make in India' initiative. 150 words · 5 August
The integration of global financial and digital infrastructure into the domestic economy requires a balanced regulatory framework. In this context, analyze how the proposed changes to tax regulations for data centres and foreign fund managers reflect India's evolving approach to global capital and technology integration. 250 words · 5 August

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