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Union Budget 2026-27 announces major relief for NRIs, PROIs
The Budget eases compliance and boosts overseas investment and travel benefits.
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Anushka Pathak - Sun, 01, Feb 2026
- 05:44 EST
- 30
Indian Finance Minister Nirmala Sitharaman / File Photo
The Indian Union Budget for FY 2026-27, presented by Finance Minister Nirmala Sitharaman on Feb. 1, 2026, introduced several measures aimed at benefiting Non-Resident Indians (NRIs), Persons Resident Outside India (PROI), relocated overseas Indians, international travelers, and small taxpayers with foreign assets.
The budget outlined reforms focused on easing compliance, improving investment access, and reducing tax and procedural burdens for overseas Indians and global travelers.
ALSO READ: Budget 2026: Part B to outline India’s long-term growth roadmap
Key measures announced include:
~ Expanded investment access for PROI: Individual PROIs are now permitted to invest in equity instruments of listed Indian companies through the Portfolio Investment Scheme.
1. Individual investment limit increased from 5 percent to 10 percent.
2. Aggregate limit for all PROI investors raised from 10 percent to 24 percent.
These measures are intended to enhance liquidity in Indian equity markets and encourage wider participation from overseas Indians.
~ Revised baggage clearance rules for international travelers: The budget proposes changes to baggage clearance provisions to align duty-free allowances with current travel patterns. The revisions also aim to provide clarity on the temporary import and export of goods during international travel.
~ One-time foreign asset disclosure scheme: A six-month voluntary compliance window has been introduced for small taxpayers, including students, young professionals, technology employees, and relocated NRIs, to disclose overseas income or assets below specified thresholds. The scheme covers two categories:
Category A: Individuals who did not disclose overseas income or assets, with a limit of up to approximately US$120,000 (INR 1 crore). Participants must pay 30 percent tax on the fair market value of the asset or undisclosed income, plus an additional 30 percent as income tax in lieu of penalty, with immunity from prosecution.
Category B: Individuals who disclosed overseas income and paid applicable taxes but failed to declare the asset. Assets up to approximately US$600,000 (INR 5 crore) qualify for immunity from penalty and prosecution upon payment of an approximately US$1,200 (INR 1 lakh) fee.
~ Reduction in TCS under Liberalized Remittance Scheme (LRS): To ease cash-flow pressures, Tax Collection at Source (TCS) rates have been lowered.
1. TCS on overseas tour program packages reduced to a flat 2 percent, from earlier rates of 5 percent and 20 percent, with no minimum threshold.
2. TCS on education and medical expenses under LRS reduced from 5 percent to 2 percent.
~ Additional tax relief for NRIs: The budget provides a five-year income tax exemption for NRIs supplying capital goods to Indian companies. It also simplifies the TDS process for NRIs selling immovable property in India, allowing resident buyers to deduct and deposit TDS using their Permanent Account Number (PAN), removing the requirement to obtain a Tax Deduction and Collection Account Number (TAN).
The announcements underscore the government’s focus on simplifying tax compliance, improving ease of doing business for the Indian diaspora, and strengthening engagement with overseas Indians and international travelers. Initial market reactions reflected optimism, particularly around the expanded PROI investment limits.
Discover more at New India Abroad.
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