Amendment of section 2

Section 35 of the Finance Act, 2026 deals with amendment of section 2. B.—Income-tax under the Income-tax Act, 2025 Amendment of section 2.

B.—Income-tax under the Income-tax Act, 2025

Amendment of section 2.

35. In section 2 of the Income-tax Act, 2025 (30 of 2025) (hereafter in this Part referred to as the Income-tax Act),—

(a)		for clause (32), the following clause shall be substituted, namely:—
		'(32) "co-operative society" means a co-operative society registered under the Co-operative Societies Act, 1912 (2 of 1912), or the Multi-State Co-operative Societies Act, 2002 (39 of 2002), or under any other law in force in any State or Union territory for the registration of co-operative societies;';
(b)		in clause (40),—

(A)		sub-clause f shall be omitted;
(B)		in the first long line below sub-clause (f) as so omitted, for sub-clause (v), the following sub-clause shall be substituted, namely:—

'(v)

any advance or loan between two group entities, where,—

(A)		one of the group entities is a "Finance Company" or a "Finance Unit";
(B)		the other group entity to the transaction is located in a country or territory outside India; and
(C)		the parent entity or the principal entity of such group is listed on the stock exchange in a country or territory outside India,

		for the purposes of items (B) and (C), the country or territory outside India shall be specified by the Central Government, by notification,';
(c)		in the second long line below sub-clause (v), in sub-clause (E), for item (II), the following items shall be substituted, namely:—

'(II)		"group entity" shall have the same meaning as assigned to the expression "group entities" in clause (m) of sub-regulation (!) of regulation 2 of the International Financial Services Authority (Payment Services) Regulations, 2024 made under the International Financial Services Centres Authority Act, 2019 (50 of 2019) (50 of 2019);
(III)		"parent entity" or "principal entity" in relation to one or more other group entities, shall be an entity of which other group entities are subsidiary and such entity,—

(a)		exercises or controls more than one-half of the total voting power either at its own or together with one or more of its subsidiaries; or
(b)		controls the composition of the Board of Directors;'.

Section 35, The Finance Act, 2026 (Act 4 of 2026).