President Droupadi Murmu gives assent to Taxation and Payment Settlement Systems (Amendment) Acts, 2026

Key facts

• President Droupadi Murmu gave assent to the Taxation and Other Laws (Amendment) Act, 2026, and the Payment and Settlement Systems (Amendment) Act, 2007, on August 17, 2026.
• The Taxation and Other Laws (Amendment) Act, 2026, replaces the June 5 ordinance providing income tax exemption to FPIs on interest income and capital gains from G-Secs.
• The act extends income tax exemption for foreign companies using contract manufacturing in India for electronics production until 2040-41.
• It also provides a 15-year income tax exemption till 2040-41 for foreign companies storing components in customs warehouses for supply to contract manufacturers in India.
• The Payment and Settlement Systems (Amendment) Act gives legal backing to the government to modify the zero-MDR framework on UPI and RuPay card transactions.
• The government can now decide via notification which electronic payment modes remain free from MDR charges.
• The UPI and Services Steering Committee, headed by NPCI, will decide on MDR charges.
• Finance Minister Nirmala Sitharaman stated that UPI payments will remain free for consumers, and any future MDR will apply only to certain categories of merchant transactions.