Finance Minister Nirmala Sitharaman has unveiled a series of measures in Union Budget 2026 aimed at easing compliance and expanding investment opportunities for Non-Resident Indians (NRIs) and overseas individuals.
The proposals cover equity investments, real estate transactions, taxation of foreign assets, and relief from Minimum Alternate Tax, among others.
Here are six major takeaways for NRIs from the Budget announcements:
1. Higher Direct Investment Limit in Indian Equities
NRIs and other Persons Resident Outside India (PROIs) investing through the Portfolio Investment Scheme (PIS) will now be allowed to hold up to 10% equity in a listed Indian company, up from the earlier 5%.
In addition, the aggregate investment limit for all NRIs and OCIs combined has been raised to 24% from 10%.
While companies earlier had the option to increase the aggregate limit through a special resolution, the key change announced in the Budget is the enhancement of the individual investment cap.
2. Clearer FEMA Framework for NRI Investments
Under the FEMA (Non-Debt Instruments) Rules, investments by NRIs and Overseas Citizens of India (OCIs) on a repatriation basis were earlier tightly capped.
The revised limits provide greater flexibility for overseas investors to take meaningful stakes in Indian companies, while remaining within the existing regulatory framework.
3. Relief in Real Estate Transactions Involving NRIs
To reduce compliance burden, the Budget proposes to remove the requirement for resident buyers to obtain a Tax Deduction and Collection Account Number (TAN) when purchasing property from a non-resident seller.
At present, TAN is mandatory in such cases for TDS compliance. The proposed amendment, effective October 1, 2026, is expected to simplify one-time property transactions involving NRIs.
4. One-Time Compliance Scheme for Foreign Assets
Acknowledging issues of inadvertent non-disclosure of foreign assets, especially by small taxpayers, the government has proposed a time-bound declaration scheme.
This will allow taxpayers to declare foreign assets or income—such as ESOPs, dormant overseas bank accounts, or legacy insurance policies—by paying applicable tax or fee, with limited immunity from penalty and prosecution under the Black Money Act. Cases involving proceeds of crime or prosecution will be excluded.
5. MAT Relief for Certain Non-Resident Businesses
The Budget proposes to exclude additional specified businesses of non-residents under presumptive taxation from the applicability of Minimum Alternate Tax (MAT).
This includes the business of operating cruise ships and providing services or technology for setting up electronics manufacturing facilities in India.
The change aims to ensure uniform tax treatment for non-resident businesses opting for presumptive taxation and will apply from April 1, 2026.
6. Tax Exemption for Supplying Capital Equipment to Electronics Manufacturers
To promote electronics manufacturing, the government has proposed a tax exemption for eligible non-resident companies supplying capital equipment, tooling, or machinery to Indian contract manufacturers operating in customs bonded areas.
The exemption will be available up to tax year 2030–31, providing long-term tax certainty to foreign companies supporting India’s electronics manufacturing ecosystem.
Overall, the Union Budget 2026 signals a clear intent to make India a more attractive and compliant-friendly destination for NRI investments, while easing regulatory and tax-related hurdles for overseas Indians.