The Union Budget 2026–27 has brought important compliance relief for Non-Resident Indians (NRIs), especially those dealing with property transactions, return filing, and small business taxation in India. The proposals aim to reduce paperwork, simplify tax procedures, and provide more time and flexibility to meet Indian tax requirements, making life easier for NRIs who continue to have financial ties with India.
Easier property sales for NRIs
One of the most important announcements for NRIs relates to the sale of immovable property in India. Earlier, when an NRI sold property, the resident buyer was required to obtain a Tax Deduction and Collection Account Number (TAN) to deduct and deposit TDS. This often delayed transactions and discouraged buyers, as TAN was needed only for a single property deal.
Under the new proposal, the resident buyer will no longer need to obtain a TAN when purchasing property from an NRI. Instead, TDS will be deducted and deposited using a PAN-based challan, similar to transactions between two resident individuals. This change removes a major compliance hurdle and makes NRI property sales smoother and faster.
Presenting the Budget, Finance Minister Nirmala Sitharaman said, “TDS on the sale of immovable property by a non-resident is proposed to be deducted and deposited through the resident buyer’s PAN-based challan instead of requiring TAN.”
Welcoming the move, Divya Baweja, Partner, Deloitte India, said, “By eliminating the need for TAN while buying property from NRIs, the Budget has addressed a long-standing compliance burden faced by individual home buyers. This is a welcome step towards simplifying TDS procedures and improving ease of compliance,” PTI reported.
To implement this relief, the government has proposed amending section 397(1)(c) of the Income Tax Act. This amendment will ensure that a resident individual does not need to obtain a TAN to deduct TDS on payments made for the transfer of immovable property by an NRI under section 393(2). The change will take effect from October 1, 2026.
More flexibility in filing income tax returns
NRIs often face difficulties in filing accurate tax returns due to foreign income disclosures, DTAA benefits, and delayed information from overseas accounts. Recognising this, the Budget allows revised or belated income tax returns to be filed up to March 31 of the following financial year, with a nominal fee. This extended window gives NRIs more breathing room to correct mistakes and ensure full compliance with Indian tax laws.