Rajya Sabha to take up Taxation Laws Amendment Bill, Bankers’ Books Evidence Bill tomorrow

The Rajya Sabha is scheduled to consider the Taxation and Other Laws (Amendment) Bill and the Bankers’ Books Evidence Bill on Monday. Both measures have already cleared the Lok Sabha, and Finance Minister Nirmala Sitharaman will introduce them for debate and passage in the Upper House.

The ‘Taxation and Other Laws (Amendment) Bill, 2026’ aims to amend the Payment and Settlement Systems Act, 2007, the Income‑tax Act, 2025, and the Finance Act, 2026. It introduces a set of tax reforms designed to stimulate investment, bolster manufacturing, provide tax certainty, and supersede the Income‑tax (Amendment) Ordinance, 2026.

Drafted amid shifting geopolitical dynamics and disruptions to global trade and supply chains, the bill’s amendments are intended to cushion the economy from external shocks, maintain domestic stability, aid sectors impacted by worldwide conditions, and enhance ease of doing business while delivering greater tax predictability.

A central tax proposal revises the criteria for qualifying offshore investment funds and their managers. The bill simplifies the Income‑tax Act, 2025 framework by trimming compliance requirements while preserving essential safeguards, thereby encouraging fund‑management activity in India and offering clearer tax treatment for international investors.

The legislation also extends tax incentives for electronics manufacturing. It prolongs the exemption for foreign firms supplying capital goods, equipment, or tooling to Indian contract makers of specified electronic items until the fiscal year ending March 31, 2041—shifting the sunset from the earlier 2030‑31 deadline. Additionally, the definition of specified electronic goods now covers laptops, tablets, servers, hearables, wearables, and related accessories.

Another notable measure introduces fresh tax exemptions for foreign investors in government securities. The bill proposes to waive interest income and capital gains arising from the sale, exchange, or transfer of government securities for Foreign Institutional Investors (FIIs) and the Bank for International Settlements, contingent on meeting prescribed reporting obligations.

To fortify India’s stance in the global diamond market, the bill grants a tax exemption through March 31, 2041 for income earned by eligible foreign diamond mining companies, sight holders, brokers, aggregators, and auction entities from the sale of rough diamonds conducted within notified special zones.

For business trusts, the bill removes a prior restriction that denied dividend‑related tax exemptions to unit holders when the special purpose vehicle (SPV) elected the new tax regime. Beyond tax adjustments, it amends the Payment and Settlement Systems Act, 2007 by deleting references to the Income‑tax Act in clauses governing electronic payment methods, and empowers the Central Government to designate electronic payment modes on which banks or system providers may not impose charges.

The Bankers’ Books Evidence Bill seeks to update the legal regime governing the admissibility of bank records as evidence, aligning it with modern digital banking practices. It replaces the existing framework with provisions that acknowledge the expanding use of electronic and digital records in banking, stating that an electronic or digital record of a banker’s book will be admissible, valid, and legally enforceable as evidence, subject to conditions set out in the legislation.

The proposed law widens the definition of “bankers’ books” to encompass records kept by banks in physical, electronic, digital, virtual, and cloud‑based formats, as well as data stored via other electronic systems. This creates a technology‑neutral, future‑ready framework that accommodates the various ways banking records are now generated, preserved, and maintained.

The bill also standardises the certification process for producing bank records as evidence in legal proceedings. It further authorises the Central Government to stipulate additional certification criteria and to extend the law’s reach to entities engaged in banking activity through notification.

The legislation addresses shortcomings of the Bankers’ Books Evidence Act, 1891, which was framed when banking records were chiefly paper‑based. Under the current regime, certified copies of bank records may serve as evidence without requiring the originals to be presented.

According to the Statement of Objects and Reasons, technological progress and the rise of digital banking have transformed how bank records are created, stored, and maintained, necessitating a stronger, more contemporary legal framework. The bill aims to ensure that banking‑evidence law evolves alongside technology while preserving the authenticity and reliability of records submitted before courts and other authorities.

It establishes a legal structure for the admissibility and certification of bank records in an increasingly digital banking environment. The two Bills were approved in the Lok Sabha by voice vote, without discussion, amid protests from opposition members over their concerns regarding police action against demonstrators in the national capital on July 20.

Published on August 9, 2026