Discuss how recent amendments to India's taxation laws aim to improve the ease of doing business and attract foreign capital. Illustrate with reference to the Taxation and Other Laws (Amendment) Bill, 2026.

Tax certainty is the decisive variable in cross-border investment decisions. The Taxation and Other Laws (Amendment) Bill, 2026, introduced in the Lok Sabha on 4 August 2026, amends the Income-tax Act, 2025, the Finance Act, 2026 and the Payment and Settlement Systems Act, 2007 [1] — a package that replaces discretionary approvals with statutory clarity.

Cutting compliance friction and discretion

• Removes the notification requirement for foreign companies and the "approved scheme" condition for data-centre tax exemption, ending multi-layered clearances [1].
• Extends the benefit to data centres leased and operated by an Indian company, not only owned ones — recognising commercial reality [1].
• Fits a wider deregulatory turn, alongside the Jan Vishwas (Amendment of Provisions) Act, 2026, which decriminalised 717 provisions across 79 Central Acts [4], and continuing regulatory-simplification efforts [5].

Attracting foreign capital

• Conditions for an eligible investment fund cut from 13 to 5, dropping the 25-member floor, ₹100-crore corpus and single-investor caps — encouraging offshore fund managers to relocate onshore [1].
• Exempts FIIs and the Bank for International Settlements from tax on interest and capital gains from government securities, deepening the sovereign debt market [1].
• Protects tax-free dividends for REIT/InvIT investors, aiding infrastructure financing [1].

Anchoring Make in India

• Foreign suppliers of capital goods and tooling to contract manufacturers of phones, laptops and servers get exemption, with warehousing in customs-bonded areas permitted, valid till 31 March 2041 [2].
• Long horizons matter more than deep rates: predictability underwrites plant-level capital commitments [3].

A caveat

• The Bill regularises the Income-tax (Amendment) Ordinance, 2026 (5 June 2026) [1]; frequent recourse to Article 123 for fiscal law weakens deliberative scrutiny, and exemptions must not enable round-tripping.

Overall, the Bill shifts India from permission-based concessions to rule-based certainty. Sustaining this requires stable rates, faster dispute resolution and strong anti-abuse safeguards, so that liberalisation deepens — rather than dilutes — the constitutional goal of equitable economic development [3].