Taxation bill clears Lok Sabha, allows provision for MDR on UPI transactions
The Lok Sabha passed the Taxation and Other Laws (Amendment) Bill, which aims to attract foreign capital and provides a framework for potential changes to the zero-MDR regime for UPI transactions. The bill also extends tax exemptions for foreign investors and simplifies relocation rules for fund managers.
Why it matters
The legislation could significantly alter the cost structure of digital payments in India and impact foreign investment flows.
The Lok Sabha on Thursday cleared the Taxation and Other Laws (Amendment) Bill without discussion as continued sloganeering by Opposition members over several issues disrupted proceedings. Following the passage of the legislation, which also amends the Payment and Settlement Systems Act, 2007, the House was adjourned for the day.The Taxation and Other Laws (Amendment) Bill is aimed at drawing more foreign capital into India, supporting domestic electronics manufacturing and providing "process certainty" to make it easier for overseas cloud companies to use data centres located in the country.About Taxation and other Laws (Amendment) BillAmong its provisions, the legislation seeks to delink the Payment and Settlement Systems Act from the Income Tax Act and provide a legal framework under which the government can alter the existing zero-MDR regime for UPI and RuPay card payments.Currently, banks and payment system providers are prohibited from levying charges, either directly or indirectly, on users making…
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