The Bill amends the Income-tax Act, 2025, the Finance Act, 2026 and the Payment and Settlement Systems Act, 2007.
The proposed changes include extending the tax holiday for foreign companies supplying capital goods, equipment and tooling to contract manufacturers of specified electronic goods.
The Bill also relaxes eligibility conditions for foreign companies procuring services from Indian data centres.
It further introduces a 15-year tax holiday for foreign companies selling rough diamonds in India, including eligible trading and auction entities, subject to prescribed conditions.
Another 15-year tax exemption has been proposed for foreign companies storing electronic components in bonded warehouses for supply to Indian contract manufacturers of specified electronic goods.
According to Sumit Singhania, Partner at Deloitte India, the amendments reflect the government’s efforts to adapt India’s tax policy to evolving geopolitical and investment trends.
He said the extension of the tax holiday for electronic goods manufacturers and the relaxed eligibility conditions for data centres could encourage investors to commit long-term capital to these sectors.
He added that the rationalisation of tax immunity rules for foreign fund managers is a step towards providing a more transparent and reliable tax framework for foreign funds looking to use India as a global operations hub.
Singhania also said the continued changes to tax rules for InvITs and REITs stress the importance of these investment structures in attracting long-term investments into capital-intensive sectors. According to him, the measures collectively could strengthen investor confidence in India’s growth story.
