Politics · India Bureau
President approves taxation and payment systems amendments
President Droupadi Murmu has granted assent to two significant legislative amendments aimed at bolstering foreign investment and modernising India's digital payment infrastructure. The bills, passed by Parliament in August, received presidential approval on August 17, 2026.
LSN India ·
The Taxation and Other Laws (Amendment) Act, 2026, and the amended Payment and Settlement Systems Act, 2007, have now become law following the President's formal assent, according to a gazette notification issued by the Ministry of Law.
The taxation amendment is designed to enhance India's appeal to foreign investors while supporting domestic manufacturing in the electronics sector. The legislation aims to provide "process certainty" for international cloud service providers seeking to establish operations using Indian data centres, creating a more favourable regulatory environment for technology companies.
The payment systems amendment grants the government statutory authority to modify the zero-Merchant Discount Rate (MDR) framework governing UPI and RuPay card transactions. Under the revised legislation, the government can now determine through notification which electronic payment modes or transaction categories will remain exempt from MDR charges, providing greater flexibility in managing the digital payments ecosystem.
These amendments reflect the government's broader policy objectives of strengthening India's position as an attractive investment destination, fostering domestic technological capabilities, and modernising the regulatory framework governing financial technology infrastructure.