The Lok Sabha passed the "Taxation and Other Laws (Amendment) Bill, 2026" on Thursday

Why in news

The Lok Sabha passed the Taxation and Other Laws (Amendment) Bill, 2026, aimed at boosting foreign investment and streamlining digital payment fee structures.

Background

The bill introduces provisions for banks to charge MDR (Merchant Discount Rate) fees on large UPI transactions. It provides tax breaks for electronics manufacturing, diamond traders, and cloud companies operating Indian data centers.

Facts for Prelims

• Act / BillTaxation and Other Laws (Amendment) Bill, 2026 passed by Lok Sabha
• FactMDR (Merchant Discount Rate) fees may be applicable to large UPI transactions
• FactTax exemptions provided for diamond traders and cloud companies running Indian data centers

For Mains

Q. Discuss how fiscal incentives and tax reforms can be leveraged to enhance India's position as a global hub for electronics manufacturing and data services.

Dimensions to cover in your answer

• Ease of Doing Business
• Foreign Direct Investment (FDI) attraction
• Digital infrastructure growth

Keywords: Fiscal Incentives · MDR Fees · Foreign Investment · Taxation Reform

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