India: Finance Bill, 2026 passed by lower house of Parliament with direct tax amendments
Revisions to direct tax proposals pending approval by the upper house of Parliament and presidential assent
The lower house of Parliament (Lok Sabha) passed the Finance Bill, 2026 on March 25, 2026, with revisions to direct tax proposals. Key changes include:
- Taxation on buyback of shares as capital gains, effective April 1, 2026
- Extension of the tax holiday for offshore banking units from 10 to 20 years
- Revised computation of interest on tax demands and refunds for earlier years
- Amendments to faceless assessment procedures
- New timelines for reassessment proceedings
- Clarifications on the validity of electronic approvals and proceedings
- Increased turnover limit for start-up tax holidays and adjustments for tax refunds
The bill will now be presented to the upper house of Parliament (Rajya Sabha) for approval and would be enacted upon receiving assent from the president.
Read a March 2026 report prepared by the KPMG member firm in India