What NRIs and Indian investors want to see in Budget 2026

The Union Budget of India covers key areas such as the economy, finance, education, technology, infrastructure, income tax and more.

Indian and NRI investors expect major changes, particularly in terms of increasing LRS limits and creating more opportunities to invest in global markets, as this opens a path for diversification. These changes will be presented on February 1st, 2026, by the finance minister in Parliament.

The existing LRS process involves significant documentation and is time-consuming, as a lot of coordination is required between banks and investors.


This process should be simplified. There should be a globally digitised portal for tracking LRS limits to improve ease of compliance. Additionally, a centralised portal providing real-time clarity for investors would be helpful.

Currently, when money is sent abroad for investment, the government collects a 20% TCS upfront. This blocks up a large portion of capital even before investing.

For example, if you plan to invest Rs 10 lakh, Rs 2 lakh is set aside as tax credit, leaving only Rs 8 lakh to be invested initially. Reducing this rate to a minimal level would make a big difference for investors. It would give more funds to investors, making global investment easier and more affordable.

Investors need clear and stable policies from the government, instead of rules that keep changing frequently. Frequent changes in limits and tax rules make people hesitant to invest their hard-earned money.

A long-term policy roadmap would give NRIs the confidence to plan important goals such as their children’s education and retirement.

With stable rules, more investors would feel comfortable building global portfolios without worrying about sudden policy changes.

Currently, foreign equities attract long-term capital gains tax at 12.5% only if held for 24 months, which is much longer than the holding period for Indian stocks.

Many investors face difficulties with double taxation because claiming relief under DTAA is complicated, often resulting in taxes being paid both in India and abroad.

When a resident sells foreign stocks, one key issue is how changes in exchange rates affect taxes. The gains are converted into Indian Rupees, and if the Rupee has weakened against the Dollar, the profit can appear much larger on paper even if the stock price hasn’t actually increased much.

This means investors may end up paying tax on currency changes rather than the real growth of their investment. A fairer system would calculate capital gains in a way that protects investors from being unfairly taxed due to exchange rate changes.

The government should also align the tax rules for overseas equities with those for Indian investments. Bringing holding periods and tax rates in line would make global diversification simpler, more attractive, and easier for investors to manage.

Global exposure can reduce the risk of country-specific investments and provide access to sectors such as AI, technology, and healthcare, as global markets move differently. However, the allocation should depend on the age, income and risk-taking capacity of investors.

NRIs also hope Budget 2026 restores the 182-day residency rule. The current 120-day threshold complicates tax planning, and reverting to 182 days would simplify rules and give NRIs confidence to maintain financial and personal ties with India.

Budget 2026 should focus on simpler, stable, and tax-efficient overseas investment opportunities, enabling investors to diversify their global investments.

(The author is Head Taxation Equirus Family Office)

(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)