NEW DELHI – India’s Union Budget 2026 has introduced measures aimed at easing property transactions for non-resident Indians (NRIs), while also lowering taxes on overseas spending, simplifying compliance and allowing larger investments in Indian equities — changes expected to benefit GCC-based Indians in particular.
A key reform affects NRI property sales. Under the new rules, tax deducted at source (TDS) on property transactions involving NRIs will now be handled by the resident buyer, removing the earlier requirement linked to obtaining a tax deduction account number (TAN). The move is intended to reduce paperwork and speed up transactions for overseas sellers.
The budget also allows taxpayers to update income tax returns even after reassessment by paying an additional 10% tax. Filing deadlines have been extended, with individuals using ITR-1 and ITR-2 allowed to file until July 31, while non-audit cases and trusts have time until August 31, providing greater flexibility for NRIs managing cross-border compliance.
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To lower the cost of overseas spending, the government cut tax collected at source (TCS) on foreign transactions. TCS on overseas tour packages has been reduced to 2% from 5–20%, with no minimum threshold. For remittances under the Liberalised Remittance Scheme (LRS) for education and medical expenses, the TCS rate has also been lowered from 5% to 2%, easing upfront costs for families sending funds abroad.
The budget further announced a scheme granting immunity from prosecution for small taxpayers, including NRIs holding non-immovable foreign assets up to Rs2 million ($24,000), allowing them to regularise compliance without fear of legal action.
On investments, the government raised limits under the Portfolio Investment Scheme, increasing the cap for an individual Person Resident Outside India (PROI) — which includes NRIs and persons of Indian origin — from 5% to 10% in a single listed company. The aggregate limit for all PROIs in one company was raised from 10% to 24%.
Taken together, the measures are expected to make it easier for GCC-based NRIs to sell property, remit money, invest in Indian markets and manage tax obligations, as India seeks to strengthen financial links with its overseas diaspora.
