Amendment of section 2

Q: When was Section 3 of the Finance Act enacted?

Section 3 of the Finance Act, cited as Finance Act 2025 3, was enacted on 16 Aug 2025 as Act 7 of 2025. It is in force as at the date shown on this page.

In force Act 7 of 2025 As on 11 Oct 2026

Act 7 of 2025 Ministry Finance Enacted 16 Aug 2025 Cited by 2 provisions

Section 3 of the Finance Act, 2025 deals with amendment of section 2. CHAPTER III DIRECT TAXES Income-tax Amendment of section 2. The Act was enacted on 16 Aug 2025.

CHAPTER III
DIRECT TAXES
Income-tax
Amendment of section 2.
3 . In section 2 of the Income-tax Act,—
(a) in clause (14), with effect from the 1st April, 2026,—
(i) for sub-clause (b), the following sub-clause shall be substituted, namely:—
"(b) any securities held by—
(i) a Foreign Institutional investor which has invested in such securities in accordance with the regulations made under the Securities and Exchange Board of India Act, 1992 (15 of 1992); or
(ii) an investment fund specified in clause (a) of Explanation 1 to section 115UB which has invested such securities in accordance with the provisions of the regulations made under the Securities and Exchange Board of India Act, 1992 (15 of 1992) or under the International Financial Services Centres Authority Act, 2019 (50 of 2019);";
(ii) in sub-clause (c), the words "on account of the applicability of the fourth and fifth provisos thereof" shall be omitted;
(b) in clause (22),—
(i) in the long line, after sub-clause (ii), the following sub-clause shall be inserted, namely:—
'(iia) any advance or loan between two group entities, where,—
(A) one of the group entity is a "Finance Company" or a "Finance Unit"; and
(B) the parent entity or principal entity of such group is listed on stock exchange in a country or territory outside India other than the country or territory outside India as may be specified by the Board in this behalf;';
(ii) in Explanation 3, after clause (b), the following clauses shall be inserted, namely:—
'(c) "Finance Company" and "Finance Unit" shall have the same meaning as assigned respectively to them in clauses (e) and (f) of sub-regulation (1) of regulation 2 of the International Financial Services Centres Authority (Finance Company) Regulations, 2021 made under the International Financial Services Centres Authority Act, 2019 (50 of 2019):
Provided that such Finance Company or Finance Unit, is set up as a global or regional corporate treasury centre for undertaking treasury activities or treasury services as per the relevant regulations made by the International Financial Services Centres Authority established under section 4 of the said Act;
(d) "group entity", "parent entity" and "principal entity" shall be such entities which satisfy such conditions as prescribed in this behalf.';
(c) in clause (47A), after sub-clause (c) and before the proviso, the following sub-clause shall be inserted with effect from the 1st April, 2026, namely:—
"(d) any crypto-asset being a digital representation of value that relies on a cryptographically secured distributed ledger or a similar technology to validate and secure transactions, whether or not such asset is included in sub-clause (a) or sub-clause (b) or sub-clause (c):".
Section 3, The Finance Act, 2025 (Act 7 of 2025).

Cross-references

Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.

This section refers to

Referred to by 2

Questions about Section 3

What does Section 3 of the Finance Act deal with?

Section 3 of the Finance Act is headed "Amendment of section 2". CHAPTER III DIRECT TAXES Income-tax Amendment of section 2.

How do I find court cases under Section 3 of the Finance Act?

In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Finance Act 2025 3, section 3 Finance Act 2025, section 3 of the Finance Act. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome.

What should I read with Section 3 of the Finance Act, and has it changed?

Its own text turns on section 2 (Income-tax), Income-tax Act 2 (Definitions), so none of them can safely be read on its own. 2 other provisions in this corpus refer back to it.

When was Section 3 of the Finance Act enacted?

Section 3 of the Finance Act, cited as Finance Act 2025 3, was enacted on 16 Aug 2025 as Act 7 of 2025. It is in force as at the date shown on this page.

Other sections of this Act

First Schedule. First Schedule10059 words
2. Income-tax8952 words
Third Schedule. Third Schedule8533 words
146. Amendment of Act 28 of 2016957 words
50. Amendment of section 158BB868 words
6. Amendment of section 10825 words

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(i)		for sub-clause (b), the following sub-clause shall be substituted, namely:—
		"(b) any securities held by—

(i)		a Foreign Institutional investor which has invested in such securities in accordance with the regulations made under the Securities and Exchange Board of India Act, 1992 (15 of 1992); or
(ii)		an investment fund specified in clause (a) of Explanation 1 to section 115UB which has invested such securities in accordance with the provisions of the regulations made under the Securities and Exchange Board of India Act, 1992 (15 of 1992) or under the International Financial Services Centres Authority Act, 2019 (50 of 2019);";

(i)		in the long line, after sub-clause (ii), the following sub-clause shall be inserted, namely:—
		'(iia) any advance or loan between two group entities, where,—

(A)		one of the group entity is a "Finance Company" or a "Finance Unit"; and
(B)		the parent entity or principal entity of such group is listed on stock exchange in a country or territory outside India other than the country or territory outside India as may be specified by the Board in this behalf;';

(ii)		in Explanation 3, after clause (b), the following clauses shall be inserted, namely:—
		'(c) "Finance Company" and "Finance Unit" shall have the same meaning as assigned respectively to them in clauses (e) and (f) of sub-regulation (1) of regulation 2 of the International Financial Services Centres Authority (Finance Company) Regulations, 2021 made under the International Financial Services Centres Authority Act, 2019 (50 of 2019):
		Provided that such Finance Company or Finance Unit, is set up as a global or regional corporate treasury centre for undertaking treasury activities or treasury services as per the relevant regulations made by the International Financial Services Centres Authority established under section 4 of the said Act;
		(d) "group entity", "parent entity" and "principal entity" shall be such entities which satisfy such conditions as prescribed in this behalf.';

(c)		in clause (47A), after sub-clause (c) and before the proviso, the following sub-clause shall be inserted with effect from the 1st April, 2026, namely:—
		"(d) any crypto-asset being a digital representation of value that relies on a cryptographically secured distributed ledger or a similar technology to validate and secure transactions, whether or not such asset is included in sub-clause (a) or sub-clause (b) or sub-clause (c):".