In a major relief for Non-Resident Indians (NRIs), Finance Minister Nirmala Sitharaman, while presenting Union Budget 2026, announced a five-year income tax exemption for non-residents who supply capital goods and equipment to toll manufacturers in bonded zones.
This move is expected to boost investment and simplify compliance for NRIs engaging with Indian businesses.
Under the new provision, TDS on the sale of immovable property by non-residents will now be deducted and deposited by resident buyers using their PAN-based challan, eliminating the need for a TAN (Temporary Accounting Number). The simplification is expected to make tax compliance easier and more efficient for NRIs.
Key Highlights for NRIs in Budget 2026:
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Five-year tax exemption: NRIs providing capital goods and equipment to bonded zone manufacturers will not have to pay income tax for five years.
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TDS simplification: Resident buyers will handle TDS deduction using PAN-based challans.
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Overseas investment boost: The government also proposed doubling the overseas individual investment limit to 10%, providing NRIs more flexibility in cross-border investments.
The Finance Minister also introduced a policy allowing foreign nationals who have been residing in India for over five years to be exempted from paying taxes on income earned abroad. This initiative aims to attract international professionals, investors, and long-term residents to India while addressing issues of double taxation.
The tax exemption and investment-friendly measures in Union Budget 2026 signal the government’s intent to make India a more attractive destination for global talent and foreign investment.
By easing compliance for NRIs and rewarding long-term commitment to India, these policies could strengthen economic ties and encourage higher capital inflows.
Sofia Babu Chacko is a journalist with over five years of experience covering Indian politics, crime, human rights, gender issues, and stories about marginalized communities. She believes that every voice matters, and journalism has a vital role to play in amplifying those voices. Sofia is committed to creating impact and shedding light on stories that truly matter. Beyond her work in the newsroom, she is also a music enthusiast who enjoys singing.
