FIIs, BIS Get Income Tax Exemption On Government Securities Under New Income Tax Ordinance

Foreign Institutional Investors (FIIs) and the Bank for International Settlements (BIS) will be exempt from income tax on interest earned from government securities and capital gains arising from their sale, exchange, or transfer under amendments introduced by the Centre through the Income-tax (Amendment) Ordinance, 2026.

The ordinance, published in the Gazette on June 5, amends Schedule IV of the Income-tax Act, 2025 and is deemed to have come into force from April 1, 2026.

The exemption is subject to furnishing information in the form and manner prescribed by the government.

As per the ordinance, the "Foreign Institutional Investor" will have the meaning assigned under the Income Tax Act, 2025, while "Government Security" will carry the meaning assigned under the Government Securities Act, 2006.

Click Here To Read The Ordinance

Ordinance Date: 05.06.2026

Ordinance No.: 02 of 2026