What NRIs Can Expect From Union Budget 2026?

• Union Budget 2026 may introduce targeted tax and compliance relief for NRIs

• Simplified tax filing, DTAA relief at source, and digital-first systems are expected

• Real estate, capital markets, and banking reforms could improve ease of investing from overseas

With India’s economy maintaining strong momentum and overseas remittances crossing $130 billion annually, NRIs are closely watching Union Budget 2026, scheduled for 1 February 2026. Finance Minister Nirmala Sitharaman’s tenth budget is expected to build on Budget 2025’s tax reforms and digital infrastructure push.

For NRIs living in cities such as Dubai, London, New York, or Singapore, the upcoming budget could ease tax compliance, simplify investments, and improve repatriation rules. While final announcements are awaited, here is what NRIs can reasonably expect based on current policy discussions and verified trends.

Tax compliance continues to be one of the biggest challenges for NRIs. Budget 2026 is expected to focus on reducing procedural friction while aligning NRI taxation with the growing dominance of the new income tax regime.

1. Simplification of DTAA timelines

Policy experts expect the window for claiming DTAA benefits to expand from two years to four years. This could offer NRIs greater flexibility in correcting filings and claiming refunds without penalties.

2. Greater alignment with the new tax regime

With a majority of salaried NRIs opting for the new regime, Budget 2026 may introduce NRI-specific clarifications to avoid double taxation and mismatches in global income reporting

Filing income tax returns in India remains complex for NRIs, particularly when foreign income and assets are involved. Budget 2026 is expected to address this long-standing issue.

1. Dedicated ITR format for NRIs

A separate ITR-NRI format is likely, featuring pre-filled foreign income fields and a simplified Schedule FA. This could significantly reduce errors and compliance delays.

2. Extended filing timelines

The government may allow a 90-day filing window after the US and UK tax year ends, helping NRIs file accurate returns without rushing or revising submissions later.

Delayed refunds under DTAA have been a persistent pain point for NRIs. Budget 2026 could aim to fix this issue at the root level.

1. DTAA benefits applied at TDS stage

Lower DTAA rates may be applied directly at the time of TDS deduction through pre-validated Form 10F, reducing the need for refunds altogether.

2. Improved TDS documentation

Redesigned Form 16A with DTAA indicators and quarterly certificates for high-value remittances could improve transparency and speed up reconciliation.

India’s tax systems have already moved online, but NRIs still face access limitations. Budget 2026 is expected to further globalise digital tax services.

1. Aadhaar-free verification options

NRIs may soon be able to complete e-verification using foreign mobile numbers, OCI cards, or net banking, without Aadhaar dependency.

2. Fully remote access to tax services

IP-agnostic portals and overseas-friendly login systems could allow NRIs to manage taxes seamlessly from any country without embassy visits.

Real estate remains a preferred investment avenue for NRIs, but compliance and taxation remain complex. Budget 2026 could bring meaningful changes.

1. Special incentives for NRI property buyers

Proposals include NRI-focused real estate zones with reduced stamp duty in select cities and simplified approval processes.

2. Easier repatriation of sale proceeds

Annual repatriation limits may increase significantly, allowing NRIs to move funds abroad without seeking prior RBI approvals.

Capital market participation by NRIs has grown steadily, and Budget 2026 may further lower entry barriers.

1. Simplified KYC and account access

A unified PAN-based KYC system could make opening and maintaining demat and trading accounts faster and easier.

2. Capital gains relief

Higher exemption limits for long-term capital gains and possible rationalisation of securities transaction tax are being widely discussed.

Cross-border remittances form the backbone of NRI financial activity, and Budget 2026 may modernise this area further.

1. Expansion of UPI and digital corridors

UPI-linked remittances and blockchain-enabled payment corridors with key global hubs could reduce costs and settlement time.

2. Higher TCS thresholds

An increase in the Liberalised Remittance Scheme limits and TCS thresholds could ease large-value transfers.

NRI banking services are expected to become more integrated and technology-driven.

1. Multi-currency account upgrades

Auto-compliant multi-currency NRO accounts with built-in FEMA checks could simplify fund management.

2. Integrated financial dashboards

Unified platforms combining banking, tax filing, remittances, and investments may reduce dependence on multiple intermediaries.

Union Budget 2026 is widely expected to focus on ease of compliance, digital access, and global integration for NRIs. While these measures remain proposals until formally announced, they reflect the government’s broader direction.

NRIs may benefit from lower compliance costs, faster refunds, smoother investments, and better control over assets in India. Those planning investments, property transactions, or remittances should closely track the final announcements and align their financial planning accordingly.