India's government plans to table the Income Tax Amendment Bill in the lower house of Parliament as early as next week to replace the ordinance notified in early June, according to people with knowledge of the matter. The bill requires only a simple majority and can be passed by a voice vote, making it easier to navigate through the current parliamentary session. An ordinance is a temporary law the government can issue when Parliament is not in session to address urgent matters and must be approved by Parliament within six months to remain in force.
The legislation aims to formalize tax cuts for foreign investors buying India's sovereign debt, as reported by people with knowledge of the matter. The bill's bipartisan nature is expected to help cut through other contentious debates in Parliament. If the bill cannot be cleared in this parliament session, the government retains the constitutional power to re-issue the ordinance and keep the tax cuts in force for another six months. This provides a backup mechanism to ensure the tax benefits remain available to foreign investors.
Lawmaking has been deadlocked in the ongoing session following student protests that culminated in the resignation of India's education minister, leading to concerns about whether key bills will be cleared during the current parliamentary session. The government's strategy to table the tax amendment bill early next week appears designed to capitalize on the bill's straightforward nature and avoid getting caught up in broader political debates. A spokesperson for the Ministry of Finance didn't respond to a request for comment on the legislative timeline.
