Budget 2026 Puts NRIs in Focus
India’s Union Budget 2026 introduces a series of measures that directly affect non-resident Indians, particularly those based in the UAE. The changes span equity investments, property transactions, overseas spending, and tax compliance, making it easier for NRIs to invest, save, and move money across borders.
The reforms signal a clear intent. The government wants overseas Indians to play a larger, more stable role in India’s financial ecosystem.
Easier Income Tax Return Updates
One of the most practical changes for NRIs relates to income tax filings.
Taxpayers will now be allowed to update their income tax returns even after reassessment by paying an additional 10 percent tax. The window for revising returns has been extended with only a nominal fee.
Individuals filing ITR-1 and ITR-2 can continue to file returns until July 31. For non-audit cases and trusts, the deadline extends to August 31. This added flexibility reduces the risk of penalties for inadvertent errors, a common concern for NRIs managing cross-border income.
Simpler Rules for NRI Property Sales
For UAE-based NRIs selling property in India, compliance has been significantly simplified.
Earlier, sellers faced procedural hurdles related to Tax Deducted at Source and the requirement to obtain a Tax Deduction and Collection Account Number. Under Budget 2026, the responsibility for deducting and depositing TDS now rests with the resident buyer.
This change removes a major friction point in property transactions and reduces delays during sale execution.
Lower Tax on Overseas Spending
Budget 2026 also reduces the cost of overseas spending for NRIs.
The Tax Collected at Source on overseas tour packages has been cut to 2 percent, down from the earlier range of 5 to 20 percent. Importantly, the minimum threshold has been removed, making foreign travel expenses simpler to manage for UAE-based Indians.
For remittances under the Liberalised Remittance Scheme used for education or medical purposes, the TCS rate has also been reduced from 5 percent to 2 percent. For families sending money abroad, this lowers upfront cash outflow, even though TCS remains adjustable against final tax liability.
Compliance Relief for Small Asset Holders
A new immunity scheme offers relief to small taxpayers, including NRIs, holding non-immovable foreign assets worth up to Rs2 million.
Under this provision, eligible individuals can regularise compliance without fear of prosecution. The move is designed to encourage voluntary disclosure and reduce anxiety around minor reporting lapses.
NRIs Can Now Invest More in Indian Equities
One of the most consequential changes for long-term investors is the increase in equity investment limits.
Under the Portfolio Investment Scheme, the cap for a Person Resident Outside India on a listed Indian company has been raised from 5 percent to 10 percent. The aggregate limit for all such overseas investors in a single company has also been increased from 10 percent to 24 percent.
For UAE-based NRIs, this opens up greater room to build meaningful equity exposure to Indian companies without breaching regulatory thresholds.
No New Investment Routes, But More Headroom
The Budget does not introduce new investment channels. NRIs can continue to invest through existing routes such as foreign portfolio investment or foreign direct investment.
What changes is scale. Higher ownership ceilings allow overseas Indians to take larger positions, especially in high-conviction, long-term holdings.
Market Impact and Policy Direction
The higher equity limits align with the government’s broader strategy of positioning Indian markets as a long-term destination for global and NRI capital. Greater overseas participation is expected to add depth and stability to equity markets, provided regulatory clarity continues.
The Finance Minister, Nirmala Sitharaman, also confirmed that the new Income Tax Act will take effect from April 1, marking the next phase of India’s tax reform agenda.
What UAE-Based NRIs Should Take Away
Budget 2026 does not rely on flashy incentives. Instead, it focuses on reducing friction.
Easier tax corrections. Cleaner property exists. Lower overseas transaction costs. Higher equity participation. Together, these changes make managing Indian assets more practical for NRIs.
For UAE-based Indians, the message is clear. India wants your capital, your patience, and your long-term participation, and Budget 2026 makes that participation simpler than before.
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Source: Gulf News
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