The Taxation and Other Laws (Amendment) Act, 2026 received Presidential assent on August 17, 2026 and was published in the Gazette of India, Part II–Section 1, on the same date. It amends the Payment and Settlement Systems Act, 2007 and the Income-tax Act, 2025, and amends the Finance Act, 2026. It also repeals the Income-tax (Amendment) Ordinance, 2026, with a saving clause deeming prior actions under the Ordinance to continue under this Act.

Payment and Settlement Systems Act, 2007: Section 10A is amended to replace the reference to electronic payment modes prescribed under Section 269SU of the Income-tax Act, 1961 with modes as the Central Government may notify.

Income-tax Act, 2025:

• Schedule I is substituted, setting out conditions under which an eligible investment fund and fund manager (Section 9(12)) will not constitute a business connection in India, covering fund residency, capped Indian-resident participation (5% of corpus), restrictions on carrying on business in India, fund manager eligibility, and a 90-day post-tax-year reporting requirement.
• Schedule IV, Sl. No. 13A: clause (d) substituted (contract manufacturers of specified electronic goods); terminal year in clause (e) extended from 2030-31 to 2040-41.
• Schedule IV, Sl. No. 13C: clause (a) omitted.
• Schedule IV: new Sl. Nos. 13D and 13E inserted, exempting interest on Government securities and related capital gains for Foreign Institutional Investors and the Bank for International Settlements, subject to prescribed disclosures.
• Schedule IV: new Sl. Nos. 13F and 13G inserted (effective October 1, 2026), exempting income from sale of rough diamonds in notified special zones and income from storage of components in custom bonded warehouses, both available up to tax year ending March 31, 2041.
• New definitional Notes inserted/substituted in Schedule IV: Note 2A (“specified electronic goods”), Note 3(c) (“specified data centre”), Note 4 (“Bank for International Settlements,” “Foreign Institutional Investor,” “Government security”), and Notes 5–6, effective October 1, 2026 (“rough diamond,” “contract manufacturer,” “custom bonded area”).
• Schedule V, Sl. No. 5: clause (b) omitted.

Finance Act, 2026: Section 3(4) and 3(12) Table entries at serial number 9 substituted to differentiate the tax rate for domestic companies generally (10%) from a new serial number 9A for domestic companies that are special purpose vehicles under Schedule V [Note 2] (25%).