The Taxation and Other Laws (Amendment) Bill, 2026 aims to simplify the tax exemption system. It builds on the Finance Act, 2026 that established exemptions for foreign firms using services from data centers in India. The industry welcomed the bill.
The Bill acknowledges data center facilities that owners or lessees operate. It also eliminates the requirement for case-specific notifications for both foreign firms and data centers.
Nasscom stated in a statement that the proposed improvements are a positive step for the industry. The Bill is presently before Parliament. ”
The upgraded idea would aid foreign cloud service companies. Additionally, it would support other international businesses active in India, including those with GCC operations.
Their models could include organizations, foreign resellers, Indian reseller agreements, and cross-border customer service. The foreign business notification removal lowers the risk that tax certainty relies on the entity name in an approval. It strengthens the overall process. The statutory criteria are met, and that is a better test.
The industry chamber stated it staunchly pushes for the framework as a tax-certainty enabler, not an approval-heavy scheme.
Nasscom stated that “it also benefits Indian data center companies since eliminating data center notice decreases the facility’s avoidable approval burden while making Indian-operated infrastructure simpler for global clients to utilize,” adding that moving from an approval-based process to a condition-based regime would be a positive step.
The Bill aims to modify the Payment and Settlement Systems Act of 2007, the Finance Act of 2026, and the Income Tax Act of 2025.
By lowering compliance standards while maintaining key protections, one of the main ideas is to make the tax structure that applies to qualified offshore investment funds and qualified fund managers easier to understand.
In addition, the Bill suggests additional tax breaks for foreign investors who purchase government bonds.