India's 2026 Tax Bill to Relax Offshore Fund Rules, Aid Digital Payments

The Indian government, led by Finance Minister Nirmala Sitharaman, introduced the Taxation and Other Laws (Amendment) Bill 2026 in the Lok Sabha. The legislation seeks to simplify tax regulations to attract foreign capital. It proposes tax exemptions for foreign portfolio investors on interest and capital gains from government securities and removes most eligibility conditions for offshore funds, such as the 25‑investor minimum, 10 % individual ownership cap, 50 % aggregate cap for the top ten investors, the Rs 100 crore corpus requirement, and restrictions on single‑entity investments.

In addition, the bill aims to boost the digital economy by amending the Payment and Settlement Systems Act, lowering digital‑payment transaction charges, and offering tax holidays for electronics and diamond sectors. Experts say the changes could make India a more competitive hub for global fund managers and support the country’s push toward a digital‑first financial system.