Union Budget 2026: 6 Major Benefits for NRIs and Overseas Investors

Union Finance Minister Nirmala Sitharaman, in the Union Budget 2026, introduced several policy changes designed to simplify regulations and encourage greater participation from Non-Resident Indians (NRIs) and overseas individuals in India’s economy.

The new measures focus on easing compliance, widening investment limits, clarifying taxation rules, and offering targeted relief across equity investments, real estate, and foreign asset disclosures.

Below are six important highlights from the Budget that directly impact NRIs:

1. Increased Equity Investment Limits for NRIs

NRIs and Persons Resident Outside India (PROIs) investing through the Portfolio Investment Scheme (PIS) can now hold a larger stake in Indian listed companies. The individual investment cap has been doubled from 5% to 10%.

Additionally, the combined investment ceiling for all NRIs and Overseas Citizens of India (OCIs) has been raised from 10% to 24%. Earlier, companies needed shareholder approval to raise the aggregate limit; the Budget’s key reform is the higher individual ownership allowance.

2. More Flexibility Under FEMA Rules

The revised provisions under the FEMA (Non-Debt Instruments) Rules offer greater clarity and flexibility for NRI and OCI investments made on a repatriation basis.

Previously, such investments were subject to restrictive caps, limiting meaningful ownership. The updated framework allows overseas investors to participate more actively in Indian businesses while staying within regulatory boundaries.

3. Simplified Property Transactions for NRIs

To ease compliance in real estate dealings involving NRIs, the government has proposed removing the requirement for resident buyers to obtain a Tax Deduction and Collection Account Number (TAN) when purchasing property from a non-resident seller.

Currently, TAN registration is mandatory for TDS compliance in such transactions. This proposed change, effective from October 1, 2026, is expected to significantly reduce paperwork for one-time property purchases.

4. Special Disclosure Window for Foreign Assets

Recognising that many taxpayers unintentionally fail to report foreign assets, the Budget introduces a one-time compliance scheme.

Under this initiative, taxpayers can declare undisclosed foreign income or assets—such as employee stock options, inactive overseas bank accounts, or old insurance policies—by paying the applicable tax or fee. Limited immunity from penalties and prosecution under the Black Money Act will be granted, excluding cases linked to criminal proceeds or ongoing legal action.

5. MAT Exemption for Select Non-Resident Businesses

The Budget proposes relief from Minimum Alternate Tax (MAT) for certain non-resident businesses that fall under presumptive taxation.

This includes entities engaged in operating cruise ships and those providing services or technology for establishing electronics manufacturing units in India. The amendment aims to ensure consistency in tax treatment and will come into effect from April 1, 2026.

6. Tax Relief for Supplying Capital Equipment to Electronics Sector

To strengthen India’s electronics manufacturing ecosystem, the government has announced a tax exemption for eligible non-resident companies supplying machinery, tooling, or capital equipment to Indian contract manufacturers operating in customs-bonded zones.

This exemption will remain available until the 2030–31 tax year, offering long-term certainty and encouraging foreign participation in the sector.

A Positive Signal for Overseas Investors

Overall, the Union Budget 2026 reflects the government’s intent to make India a more welcoming destination for NRI and overseas investments. By easing regulatory bottlenecks, expanding ownership limits, and offering targeted tax relief, the Budget seeks to boost investor confidence while ensuring smoother compliance for global Indians.

Also read: Budget 2026 Price Impact: What Gets Cheaper and What Turns Costlier