Budget 2026: Finance Minister Nirmala Sitharaman on Sunday announced a major relief package for the Indian diaspora and the NRI community as a part of the broader layout of the union budget 2026-2027.
The biggest headline grabbing item from the multiple announcements aimed at providing investment and tax based relief to NRIs is a new five-year income tax exemption for specific NRI business activities. These changes aim to simplify life for global Indians and encourage investment in local manufacturing.
The move is tied with the broader government efforts to connect NRI capital more directly with the India growth story.
Boost for Manufacturing: 5-Year Tax Holiday for Capital Goods
The government has introduced a special tax holiday to turn NRIs into partners for “Make in India.” NRIs providing capital goods to Indian companies will now enjoy a total income tax exemption for five years.
This move targets the modernisation of Indian factories and brings about the much talked about fourth industrial revolution for heavy industries. This move allows NRIs to supply advanced machinery and technology without the burden of heavy taxes.
By removing this tax, the government hopes to lower the cost of production for domestic firms. This exemption is expected to attract high-tech equipment from the NRI community into priority development sectors like electronics and green energy.
The move provides additional incentives for the diaspora to contribute to India’s goal of becoming a global manufacturing hub.
Simplified Compliance: No More TAN for Property Sales
In another development, selling property in India got much easier for NRIs. Previously, resident buyers had to obtain a Tax Deduction and Collection Account Number (TAN) to buy property from an NRI. This caused long delays and paperwork.
The Budget 2026 replaces this with a PAN-based system. Now, buyers can use their regular PAN to deposit TDS on property bought from an NRI.
Foreign Asset Disclosure Scheme (FAST-DS 2026)
Additionally, the government launched the Foreign Asset Disclosure Scheme (FAST-DS 2026). This is a one-time, six-month window for relocated NRIs and students. It allows them to report overseas bank accounts or assets below certain limits without facing heavy penalties.
This “fresh start” policy aims to reduce legal stress for small taxpayers who missed reporting legacy assets.
Key Takeaways for NRIs
- 5-Year Exemption: NRIs supplying capital goods to Indian firms get a 5-year tax holiday.
- Property Ease: Resident buyers can now use PAN instead of TAN for TDS on NRI property deals.
- Equity Boost: The individual investment limit for NRIs in Indian listed companies is doubled from 5% to 10%.
- Lower TCS: Tax Collected at Source on overseas tour packages and education remittances is slashed to 2%.
- MAT Relief: NRIs under the presumptive taxation scheme are now exempt from Minimum Alternate Tax (MAT).