The Union Budget 2026–27 has introduced targeted, practical reforms that directly impact Non-Resident Indians (NRIs).
While there are no sweeping tax rate changes, the Budget focuses on simplifying compliance, easing property transactions,
and improving investment access for NRIs.
This blog breaks down Budget 2026 exclusively from an NRI perspective—covering taxation, property sales, remittances,
investments, and FEMA-linked implications.
PROPERTY SALE BY NRIs: KEY COMPLIANCE EASE
One of the most significant announcements for NRIs relates to TDS compliance on sale of immovable property in India.
Resident buyers purchasing property from NRIs will now be allowed to deduct TDS using PAN-based reporting instead of obtaining a TAN.
This change substantially reduces friction in NRI property sales, especially in resale transactions where buyers were
previously hesitant due to TAN-related compliance.
Impact for NRIs:
- Faster property closures
- Reduced buyer resistance
- Cleaner tax compliance trail
NO CHANGE IN CAPITAL GAINS TAX REGIME FOR NRIs
The Budget does not alter the existing capital gains tax framework applicable to NRIs.
Long-term capital gains on property continue to be taxed at 12.5% without indexation (as per current law) and short-term gains remain taxed at applicable slab rates.
NRIs planning property exits can continue using existing tax models without recalibration.
LOWER TCS ON FOREIGN REMITTANCES – INDIRECT BENEFIT TO NRIs
Tax Collected at Source (TCS) on foreign remittances for education and medical purposes has been reduced to 2%.
While LRS technically applies to residents, this change benefits NRI families remitting funds for children or dependents abroad.
This improves cash flow and reduces temporary tax blockage.
NRI INVESTMENT LIMITS IN INDIAN EQUITIES EXPANDED
The Budget increases permissible investment limits under the Portfolio Investment Scheme (PIS).
This allows NRIs to take larger stakes in Indian listed companies within FEMA limits.
For serious India-focused investors, this improves portfolio flexibility and scalability.
MAT EXEMPTION FOR NRIs UNDER PRESUMPTIVE TAXATION
NRIs opting for presumptive taxation for eligible income streams will be exempt from Minimum Alternate Tax (MAT).
This reduces tax complexity and ensures minimum tax provisions do not distort effective tax rates.
FOREIGN ASSET DISCLOSURE WINDOW
A one-time compliance window has been introduced for small taxpayers and returning NRIs to regularise foreign asset disclosures.
This reduces litigation exposure and helps clean up legacy reporting issues.
FEMA & REPATRIATION: STATUS QUO MAINTAINED
The Budget does not modify FEMA repatriation limits.
NRIs can continue repatriating up to USD 1 million per financial year from NRO accounts after tax compliance.
Existing procedures involving Form 15CA/15CB and bank certifications remain unchanged.
PROFESSIONAL TAKEAWAY FOR NRIs
Budget 2026 is not transformational—but it is strategically positive for NRIs.
The focus is on reducing procedural friction rather than changing tax rates.
Property sales, equity investments, and compliance management become incrementally easier.
For NRIs, execution efficiency not tax arbitrage is the real win.
FREQUENTLY ASKED QUESTIONS (FAQs)
- Does Budget 2026 change capital gains tax for NRIs?
No, capital gains tax structure remains unchanged. - Is TAN still required for buyers purchasing property from NRIs?
No, PAN-based TDS compliance is now permitted. - Has the USD 1 million repatriation limit changed?
No, FEMA repatriation limits remain the same. - Does lower TCS apply to NRIs?
Indirectly, mainly benefiting resident family members remitting funds abroad. - Can NRIs invest more in Indian shares now?
Yes, higher PIS limits allow increased equity exposure. - Is MAT still applicable to NRIs?
Not if they opt for presumptive taxation under eligible sections. - Is this a good time for NRIs to sell property?
Compliance ease improves execution, but tax impact remains neutral. - Does the Budget simplify NRI compliance overall?
Yes, through targeted procedural rationalisation.
