From tax relief to easier property sales: 5 NRI rule changes

Union Budget 2026 marks one of the most decisive shifts in India’s engagement with Non-Resident Indians (NRIs) and overseas Indians in recent years. Rather than incremental tweaks, the government has rolled out a set of coordinated measures to simplify compliance, expand investment access, and encourage skilled professionals and long-term capital to engage more deeply with India.

From easing property transaction bottlenecks and opening up equity markets to a broader class of overseas investors, to offering targeted tax relief for visiting professionals and a one-time compliance amnesty, the budget reflects a clear move towards predictability and ease.

Market participants say these steps collectively reduce long-standing friction points that discouraged NRIs from fully participating in India’s growth story.


Also read: Come clean or face the heat: 5 Budget 2026 signals for taxpayers

Easier property transactions

One of the most tangible changes in budget 2026 relates to property transactions involving NRIs. Until now, resident buyers purchasing property from non-residents were required to obtain a Tax Deduction and Collection Account Number (TAN) to deduct TDS, even for one-time transactions. This often resulted in procedural delays and last-minute complications during property registration.

As per the budget proposals, resident individuals and Hindu Undivided Families (HUFs) will no longer require a TAN for such transactions.

Instead, TDS can be deducted and deposited using a PAN-based challan, thereby aligning it with transactions involving resident sellers.

Jidesh Kumar, Managing Partner at King Stubb & Kasiva, says the earlier framework disproportionately affected individual buyers. “The TAN requirement often led to delays, procedural errors and uncertainty around timelines,” he says.

For NRIs, this change improves transaction certainty and reduces the risk of deals falling through due to compliance-related delays, an issue frequently flagged by overseas sellers.

Foreign assets’ disclosure

The budget also introduces a one-time, sixmonth disclosure window for NRIs and returning professionals to declare previously undisclosed overseas assets. Those who make disclosures within this window will be shielded from the full penal consequences under the Black Money (Undisclosed Foreign Income and Assets) Act.

According to Kumar, the government is moving from punitive enforcement to voluntary compliance, particularly in an era of enhanced global information exchange, adding that “the short window signals stricter enforcement once the amnesty period ends”.

For returning NRIs who may have inadvertently missed disclosures in earlier filings, this offers a critical opportunity to clean up legacy non-compliance and re-enter the Indian tax system with confidence.

For returning NRIs, asset disclosure has often been a source of anxiety. Budget 2026’s amnesty window directly addresses this, allowing individuals who inadvertently failed to disclose foreign assets to regularise their position.

C.J. George, Chairman and Managing Director of Geojit Financial Services calls this a positive and confidence-building move. “It recognises the practical challenges faced by returning NRIs and provides a clean slate, while reinforcing transparency,” he says.

Also read: Budget 2026 alters equity taxes: Buybacks, dividends decoded

Tax exemption for visiting NRIs

If you are an NRI and work in India on a project for a longer duration (more than 182 days), you become a resident of India and get taxed accordingly.

To attract talent to work in India, the budget has announced tax incentives. Your foreign income earned in the first five years of living in India will now be tax-free. However, this sop is not intended for all NRIs who come back to India. You should have been an NRI for five successive years prior to starting work in India. You should be providing services under the government-notified scheme (to be notified soon), which appears to be intended to attract talent to certain emerging, technology– intensive sectors. Simply getting a job at a private Indian firm isn’t enough; the project must be on the government’s approved list.

“The exemption is narrowly framed to ensure it benefits genuine overseas professionals rather than frequent visitors,” says Sucharita Basu, Managing Partner at AQUILAW.

Higher investment limits

The most far-reaching reform for overseas investors lies in the expansion of equity market access. Budget 2026 allows Persons Resident Outside India (PROIs), a broader category than NRIs and OCI holders, to directly invest in Indian equities under the Portfolio Investment Scheme (PIS).

At the same time, the individual investment cap has been doubled from 5% to 10% of a company’s paid-up capital, while the aggregate cap for all PROIs has been raised from 10% to 24%.

George describes this as a landmark reform. “For the first time, foreign passport holders, not just NRIs and OCI holders, can directly access the Indian equity market. This is a revolutionary step in attracting foreign nationals to Indian markets,” he says.

Also read: What is Person Resident Outside India (PROI)? Residential status under FEMA, Income Tax Act explained

George points out that this is particularly relevant for individuals of Indian origin who do not hold OCI cards and were previously restricted from participating meaningfully in Indian equities.

Vivek Rajaraman, Managing Director and Head of Domestic Client Advisory at Waterfield Advisors, says the reforms materially improve how NRIs and overseas investors can structure their exposure to India.

“These measures give NRIs and PROIs greater flexibility and fewer trading restrictions, which is especially useful for active investors and wealth-management-driven allocations,” he says.

He adds that PROIs now have direct access to Portfolio Management Services (PMS) without routing investments through GIFT City, significantly reducing operational complexity.

Rajaraman believes the changes will expand the investor base for Indian equities, simplify investment processes for non-residents, and potentially increase foreign portfolio inflows, all while maintaining regulatory oversight.

Simplifying the tax regime

Budget 2026 streamlines the ‘Special Tax Regime’, an optional flat-tax system for NRIs, by merging several scattered laws into one. While tax rates remain unchanged, this ‘one-stop’ legal structure eliminates ambiguity. For NRIs and those planning to return to India, it offers much-needed certainty, making it easier to manage long-term Indian investments without the fear of complex tax disputes.

Overall, the budget represents a move to lower administrative and regulatory barriers for NRIs and overseas Indians across property, taxation, and capital markets. By focusing on access, clarity and ease of compliance, the government has signalled that it wants its global diaspora to play a larger, more stable role in India’s economic journey.

As Rajaraman sums up, these reforms align with India’s broader effort to deepen capital markets and attract long-term global participation, without compromising on regulatory discipline.