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Tata Capital > Blog > Wealth Services > Union Budget 2026: What’s in it for the NRIs?

Wealth Services

Union Budget 2026: What’s in it for the NRIs?

Union Budget 2026: What’s in it for the NRIs?

In her ninth consecutive  Union Budget presentation, Smt. Nirmala Sitharaman has included several proposals that can be of great interest to all Non-Resident Indians (NRIs). The Indian Finance Minister has proposed increasing the equity investment limits for NRIs and reducing the tax collected at source. Besides, she has also proposed relaxations in various formalities that involve non-residents.

Here is a look at the key highlights for NRIs in the Union Budget 2026.

Tax relief for NRIs

The key tax reliefs announced for NRIs in this year’s budget include,

  • Eligible NRIs will be exempt from the minimum alternative tax under presumptive taxation
  • NRIs will not be liable to any criminal prosecution for small, undisclosed foreign assets of up to Rs. 20 lakhs
  • The budget has reduced the tax collection rate (TCS) on overseas tour packages from 5% to 2%. The same reduction has also been made in the case of remittances for education or medical purposes under the Liberalized Remittance Scheme

Also, read – Know all the nitty-gritties of NRI home loans

Compliance-related change proposals

Compliance-related reliefs that have been made available to NRIs in the Union Budget 2026 include,

  • An extension in the filing of belated and revised returns to the 31st of March
  • The option to revise the return even during assessment, without any additional tax dues
  • Penalties have been reduced, and minor technical defaults have been decriminalized in this budget
  • The finance minister continues to bat for simplification in tax forms and procedures. This includes simplification of Form 15G and 15H, tax documentation processes, and easier management of tax deductions on interest income

Disclosure in the FAST Lane

NRIs are given a six-month window under the Foreign Assets of Small Taxpayers Scheme (FAST-DS 2026) to disclose any unreported foreign assets or income. While tax and interest will be applicable, the budget proposes a reduction in penalty and a waiver of prosecution. This greatly incentivises NRIs to disclose adequately while eliminating disputes with the tax department.

Similarly, NRIs with smaller undeclared foreign assets will enjoy tax relief in the future. This relief is proposed under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.

Also, read – Venture capital market in India: From strength to strength

Reforms in property transactions

The new budget proposals are expected to make property transactions easier for NRIs. This includes a reduction in compliance formalities, simplification of tax deductions and streamlining NRI real estate transactions. Tax Deduction and Collection Account Number (TAN) will no longer be a mandatory requirement for NRIs entering into a property transaction in India, as PAN-based TDS payment will be deemed to be sufficient.

Equity investment reforms

Budget 2026 has also opened up equity investment opportunities for NRIs further. NRIs can invest in Indian equities through the Portfolio Investment Scheme (PIS) for up to 5% in individual cases, and 10% in aggregate. These limits have now been increased to 10% in individual equity investments, while the aggregate cap has been increased to 24%. This will also mean that foreign cash flow into Indian equities will increase, and individual Persons Resident Outside India (PROI) will enjoy a wider window to Indian equities.

Overall impact on NRIs

With the Union Budget 2026 proposals, NRIs will enjoy easier tax compliance and reduced risk of disputes. The budget encourages foreign asset disclosure with new reliefs, while inviting NRIs to invest more in equities through the portfolio route. These measures are expected to make India an attractive investment destination for NRIs.

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FAQs

What is the foreign asset disclosure relief introduced in Budget 2026?

The budget proposed a one-time 6 month window for voluntary disclosure of foreign assets and income without any risk of prosecution. It is expected to encourage NRIs to rectify past non-disclosures transparently.

Will Budget 2026 affect NRI remittances to India?

NRIs can continue to remit money to and from India through existing channels and processes. No changes have been proposed on NRI remittances in the new budget.  

Are there any changes to GIFT City investments for NRIs?

The budget has proposed to improve the tax incentives available on GIFT City investments. NRIs can also benefit from these extended and improved tax concessions on their investments in GIFT City.
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