Budget 2026: FM Sitharaman proposes exemption from Minimum Alternate Tax to all non-residents who pay tax on presumptive basis

Finance Minister Nirmala Sitharaman on Sunday proposed tax relief measures for non-residents and businesses in Union Budget 2026. She said non-residents who pay tax under the presumptive taxation system will be exempt from Minimum Alternate Tax (MAT).

Presenting the Budget, Sitharaman announced that the turnover threshold to avail safe harbour benefits for IT services will be raised from Rs 300 crore to Rs 2,000 crore.

She also said the tax collected at source on liquor, scrap and minerals will be brought down to 2 per cent.


The Finance Minister added that the definition of accountants under the safe harbour rules will be streamlined to support domestic accounting firms.

She further announced that dividend income earned by inter-cooperative societies will be allowed as a deduction under the new tax regime.

The previous budget had announced major income tax changes that affect Non-Resident Indians and resident taxpayers. The focus was on easier compliance, revised tax slabs, higher exemptions, and simpler rules for remittances, rental income, and property transactions. The Budget also updated NRI residency rules and global income taxation.

A key change for NRIs last year was the revised residency rule. Indian citizens earning more than Rs. 15 lakh from Indian sources are now treated as residents if they stay in India for 120 days or more in a financial year. Earlier, the limit was 182 days. This brought more high-income NRIs under Indian tax laws.

The previous budget had also tightened global income taxation. Indian citizens who are not taxed in any other country will be deemed residents of India, making their global income taxable in India. The move was aimed at preventing tax avoidance and widening the tax base.