Museveni’s decision was announced late on Thursday after a meeting of parliamentarians in his ruling party, almost all of whom support the bill approved by lawmakers last month.
The meeting resolved to return the bill to the national assembly “with proposals for its improvement”, a statement said.
A spokesman for the presidency said Museveni was not opposed to the punishments proposed in the bill, but wanted parliamentarians to look into “the issue of rehabilitation”.
“[Museveni] told the members that he had no objections to the punishments but on the issue of rehabilitation of the persons who have in the past been engaged in homosexuality but would like to live normal lives again,” spokesman Sandor Walusimbi said on Twitter.
“It was agreed that the bill goes back to parliament for the issues of rehabilitation to be looked at before he can sign it into law,” Walusimbi added.