Income-tax, MSME amendment Bills among key economic legislations listed for Parliament's Monsoon Session
Parliament's Monsoon Session (scheduled from July 20 to August 13, 2026) has listed several economy-related Bills for introduction, consideration, and passage.
The Income-tax (Amendment) Bill, 2026 has been listed; it is intended to replace an earlier ordinance and is aimed at strengthening India's sovereign debt market, attracting foreign capital, and improving market liquidity.
The Micro, Small and Medium Enterprises Development (Amendment) Bill, 2026 has been listed to strengthen the mechanism for resolving delayed payments to micro and small enterprises (MSEs), enable enforcement of arbitral awards in such disputes, and give States flexibility in constituting Micro and Small Enterprises Facilitation Councils (MSEFCs).
The Foreign Contribution (Regulation) Amendment Bill, 2026 — introduced earlier in the session calendar — is also listed for consideration and passage, proposing a designated authority to manage assets of organisations that lose their FCRA registration and rationalising penalties for violations.
The Income Tax Act, 2025 and the new amendment cycle
The Income Tax Act, 2025 came into force on April 1, 2026, repealing and replacing the six-decade-old Income Tax Act, 1961. The new Act consolidates and simplifies the direct-tax statute — reducing 819 sections (1961 Act) to 536 sections across 16 schedules — while retaining the substantive tax framework. The Income-tax (Amendment) Bill, 2026 now listed for the Monsoon Session amends provisions within this newly enacted code (replacing an ordinance issued in the interim) rather than reopening the 1961 Act.
Key Details
- Income Tax Act, 1961: 819 sections, 14 schedules (repealed).
- Income Tax Act, 2025: 536 sections, 16 schedules; applicable from Tax Year 2026–27 (with savings/transitional provisions for pending matters under the old Act).
- The current Amendment Bill's stated aim is developing the sovereign (government) debt market, easing foreign capital participation, and improving liquidity — objectives distinct from the base Act's simplification goal.
The listing of a fresh Income-tax Amendment Bill so soon after the 2025 Act took effect shows how frequently direct-tax law is fine-tuned via amendment ordinances/bills — a pattern UPSC has tested through "which Act governs which year's assessment" type questions.
The MSMED Act, 2006 — classification and delayed-payment protections
The Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 is the statutory basis for defining and supporting MSMEs in India, including provisions to protect micro and small suppliers from delayed payments by buyers.
Key Details
- Classification (revised effective April 1, 2025, using a composite investment + turnover test — both must be satisfied): Micro — investment up to ₹2.5 crore, turnover up to ₹10 crore; Small — investment up to ₹25 crore, turnover up to ₹100 crore; Medium — investment up to ₹125 crore, turnover up to ₹500 crore.
- Section 15 requires buyers to pay MSE suppliers within an agreed period not exceeding 45 days from acceptance of goods/services (15 days if no written agreement exists).
- Section 16 imposes compound interest, at three times the RBI-notified bank rate, on payments delayed beyond the appointed date.
- Disputes go to the State-level Micro and Small Enterprises Facilitation Council (MSEFC), which is expected to decide references within 90 days.
The listed MSME Development (Amendment) Bill, 2026 targets exactly this delayed-payment machinery — strengthening enforcement (including of arbitral awards) and letting States decide the composition of their MSEFCs, addressing long-standing complaints about slow resolution of payment disputes.
The FCRA, 2010 — regulating foreign contributions to Indian entities
The Foreign Contribution (Regulation) Act, 2010 (FCRA) governs the acceptance and utilisation of foreign contributions/donations by individuals, associations, and companies in India, on grounds of national security and orderly conduct of activities "prejudicial to the national interest."
Key Details
- The Foreign Contribution (Regulation) Amendment Bill, 2026 was introduced in the Lok Sabha in March 2026 and proposes a "Designated Authority" to supervise, manage, and dispose of the foreign contributions and assets of organisations whose FCRA registration is suspended or has ceased.
- The Bill also proposes rationalising penalties, reducing the maximum term of imprisonment for violations from five years to one year, while requiring prior Central Government approval before investigations are initiated.
Its listing for passage alongside the Income-tax and MSME Bills places it within the broader Monsoon Session legislative agenda on regulatory and economic governance, even though its subject matter (foreign-funding oversight of non-profits) is distinct from the tax/MSME items.
- Monsoon Session 2026 dates: July 20 to August 13.
- Income Tax Act, 2025 replaced the Income Tax Act, 1961, effective April 1, 2026 (536 sections/16 schedules vs. 819 sections/14 schedules).
- Revised MSME thresholds (effective April 1, 2025): Micro ≤ ₹2.5 cr investment / ≤ ₹10 cr turnover; Small ≤ ₹25 cr / ≤ ₹100 cr; Medium ≤ ₹125 cr / ≤ ₹500 cr.
- MSMED Act Section 15: payment due within 45 days (or 15 days without written agreement); Section 16: interest at 3x RBI bank rate on delayed payments.
- FCRA Amendment Bill, 2026 introduced in Lok Sabha on March 25, 2026; proposes cutting maximum imprisonment penalty from 5 years to 1 year.