GS3Economy · S&T · Environment · Security· Capital markets & SEBI· Prelims + Mains·
The Lok Sabha passed the Taxation and Other Laws (Amendment) Bill, 2026, to exempt Foreign Institutional Investors (FIIs) from tax on Indian government securities to boost capital inflows.
The bill exempts FIIs from income tax on interest earnings and capital gains from Indian government securities. The exemption applies to investments made on or after April 1, 2026, aiming to align India's tax regime with global standards.
Q. Discuss how fiscal policy measures like tax exemptions for Foreign Institutional Investors can influence India's capital market depth and long-term investment stability.
Dimensions to cover in your answer
Keywords: Capital Inflow · Fiscal Policy · Tax Neutrality · Market Liberalization · Foreign Institutional Investors
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