Union Budget Offers Major Tax Relief for NRIs, Boosts Global Indian Engagement

New Delhi: The Union Budget has unveiled a series of tax reforms and incentives that offer renewed optimism to the global Indian community. Anchored in the vision of Viksit Bharat 2047, the budget places strong emphasis on compliance simplification, global mobility and trust-based taxation, with several measures tailored for non-resident Indians (NRIs), foreign students and mobile professionals.

A key highlight is a five-year full income tax exemption for NRIs involved in supplying capital goods to Indian manufacturers. This measure is aimed at strengthening the Make in India initiative by attracting NRI investment into priority sectors such as electronics and green energy.

Key Announcements for NRIs and Overseas Indians

One-time foreign asset disclosure scheme:
A six-month window has been announced to allow students, young professionals, tech workers and relocated NRIs to disclose foreign assets and resolve legacy tax non-compliance issues.

Make in India boost:
NRIs investing in specified manufacturing activities will enjoy complete income tax exemption for five years. NRIs supplying capital goods to Indian manufacturers will also qualify for this benefit.

Reduced TCS on foreign travel and remittances:
Tax Collected at Source (TCS) on foreign tour packages has been reduced from 5% to 2%. Under the Liberalised Remittance Scheme, TCS on overseas education and medical expenses has also been cut to 2%, easing the upfront tax burden on students and patients abroad.

Higher investment limits for NRIs:
The individual investment cap for NRIs has been raised from 5% to 10%, while the overall sectoral cap has been increased from 10% to 24%, encouraging greater foreign participation in Indian companies.

Simplified NRI real estate transactions:
The budget introduces streamlined tax deduction mechanisms for property transactions involving non-resident sellers. Requirements for obtaining a separate Tax Deduction and Collection Account Number (TAN) have been relaxed, allowing TDS payments through existing TAN-based challans.

Extended deadlines for revised tax returns:
The government has extended timelines for revising income tax returns with a nominal fee beyond December 31. For unaudited businesses and trusts, the filing deadline for ITR-1 and ITR-2 has been extended to August 31, offering relief to taxpayers with foreign income and assets.

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