Lok Sabha approves G-Sec tax exemption bill for foreign investors
Business
India's Lok Sabha just approved a bill that lets foreign investors skip income tax on interest and capital gains from government bonds (G-Secs), starting April 1, 2026.
This replaces an earlier ordinance but keeps everything already done under it.
The move is all about making India's bond market more inviting for global players.
Tax changes target global fund inflows
With the old taxes (20% on interest, 30% on short-term gains, and 12.5% on long-term gains) now gone for FIIs, India hopes to attract big funds like pension and sovereign wealth funds.
The Finance Ministry says this shift lines up with global standards and aims to boost investment, liquidity, and stability in India's government securities market.
Even the Bank for International Settlements gets similar perks.