The Indian government has introduced several important reforms for Non-Resident Indians (NRIs) through the Union Budget 2026, making property transactions, taxation, and investments easier and more transparent. These changes are expected to benefit NRIs who own property in India or are planning to invest in the country’s growing real estate sector.
Union Budget 2026 had introduced major relief for NRIs in property taxation. Earlier, NRIs selling property after long-term ownership had to pay 20% capital gains tax with indexation benefits. New indexation helped reduce taxable profit by adjusting the property value according to inflation. Under the revised rule introduced, properties purchased after July 23, 2024, will attract a lower 12.5% long-term capital gains tax without indexation benefits. However, owners of older properties still have the option to choose the earlier 20% tax structure with indexation if it offers better tax savings.
Another important change in Budget 2026 relates to multiple property ownership. Earlier in Budget 2025, if NRIs owned more than one house in India and kept the second house vacant, the government treated it as rented and charged tax on “notional rent,” even if no rental income was earned. Now, NRIs can declare two properties as self-occupied without paying tax on notional rent. Experts believe this move will reduce financial pressure on families owning multiple homes in India.
Major change announced in 2026 Union Budget relates to property transactions involving NRIs. Earlier in 2025, if a resident Indian purchased property from an NRI seller, the buyer was required to obtain a TAN (Tax Deduction and Collection Account Number) to deduct and deposit TDS on the transaction. Many buyers considered this process complicated because TAN is usually meant for businesses and companies, not individuals making one-time property purchases.
Under the new Budget 2026 rule, buyers will no longer need a TAN for such transactions. However, they now have the choice of simply availing their PAN card to make deductions and deposit TDS while buying property from NRIs. The change of law is estimated to take place from October 1, 2026, onwards, thereby simplifying processes and making transactions easier.
One more change that has been initiated by the government is an increase in the limit of tax exemption in the Liberalized Remittance Scheme from 7 Lakh to 10 Lakh. Also, investment limits have been increased for foreign investors in Indian stock exchanges.
In all, these changes would facilitate ease of business, minimize complications related to taxes, and promote investments from NRIs in India.
