GoI gives exemption on G Sec to FIIs

The Government has introduced targeted tax incentives for foreign investors and international financial institutions by promulgating the Income-tax (Amendment) Ordinance, 2026. 

The Ordinance inserts Serial Nos. 13D and 13E in Schedule IV of the Income-tax Act, 2025, granting exemption from income tax on interest earned from Government securities and capital gains arising from their sale, exchange, or transfer.

The exemptions are specifically available to Foreign Institutional Investors (FIIs) and the Bank for International Settlements (BIS), subject to compliance with prescribed information furnishing requirements. 

The amendment appears aimed at enhancing the attractiveness of India's sovereign debt market, encouraging greater participation by foreign investors, and strengthening integration of Indian Government securities with global financial markets.