Finance Bill passed with 32 amendments

NEW DELHI: The Lok Sabha on Wednesday passed the Finance Bill, with 32 amendments moved by finance minister Nirmala Sitharaman, including specifying that in case of buyback of shares, additional income tax on capital gains made by promoters will face a 12% surcharge.The Finance Bill had proposed to replace dividend tax applicable to buybacks and had reintroduced capital gains tax. It had provided for an additional capital gains tax applicable in a case where the buyback of shares was from a promoter, where the amendment will now apply.“The Finance Bill 2026 shifts buyback taxation to the shareholder level, but the applicable surcharge was initially unclear, especially for promoters and high-income taxpayers. The amendment now suggests that surcharge on buyback income will be taxed at 12%, which would reduce the effective tax burden,” said Amit Maheshwari, managing partner at consulting firm AKM Global.Besides, there are changes related to tax holiday for startups too which applies to those with turnover up to Rs 100 crore.“The threshold has been increased to Rs 300 crore, with the result that an eligible start-up with turnover up to Rs 300 crore can now qualify for the tax holiday from financial year 2026-27,” said Pranav Sayta, partner and national leader for international tax and transaction services at consulting firm EY India. “Most of the amendments are largely to bring about greater clarity and ensure that the language is in line with the intent of provisions,” he added.He also pointed out that currently, there is no stipulated minimum time for a taxpayer to file an income tax return in response to notice for reopening or reassessment. “Now the amendments specifically provide that the taxpayer must be given a minimum time of 30 days for filing such a return in response to a notice for reopening/reassessments,” Sayta added.Replying to the debate in the Lok Sabha, Sitharaman said that the budget has taken several “facilitative” steps for the middle class and small businesses. She also said there is a trust-based tax administration, that is being improved by reducing unnecessary hardship for honest taxpayers. FM said India is riding on the “reform express” with reforms not happening out of compulsion, but out of conviction, clarity, confidence and commitment.