Budget 2026 brings major relief for NRIs: Investment limit doubled to 10%, TCS cut on overseas tours and education

Last year’s Budget also removed TCS on education loans taken under LRS, offering relief to students pursuing higher studies abroad through approved loans.

Finance Minister Nirmala Sitharaman’s Union Budget 2026-27 eases overseas financial transactions for NRIs and families, lowers TCS on foreign travel, education, and medical remittances, and raises equity investment limits for overseas individuals to boost capital inflows.

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Finance Minister Nirmala Sitharaman on Sunday unveiled a suite of reforms in the Union Budget 2026–27 aimed at making overseas financial transactions easier and more affordable for Non-Resident Indians, international travellers and families funding education or medical treatment abroad.

The measures are intended to lower upfront tax burdens, simplify compliance and deepen overseas participation in India’s financial ecosystem.

Easier equity investment for overseas individuals

One of the key announcements allows individual persons resident outside India to invest more freely in Indian equity markets. While presenting the Budget in Parliament, Sitharaman said, “Individual persons resident outside India, P-R-O-I, will be permitted to invest in equity instruments. It is also proposed to increase the investment limit for an individual PROI under the scheme from 5% to 10% with an overall investment limit for all individual PROIs to 24% from the current 10%.”

The move marks a significant liberalisation under the Portfolio Investment Scheme and is aimed at attracting long-term capital from the global Indian diaspora while widening participation in domestic equity markets.

Lower TCS on overseas tour packages

The Budget also announced a major rationalisation of Tax Collected at Source on foreign travel spending. The TCS rate on overseas tour packages will be reduced to a flat 2 per cent.

Earlier, foreign tour packages attracted a higher and tiered TCS structure, with rates rising sharply beyond certain thresholds. The new rule simplifies the framework, with the 2 percent rate applying “without any stipulation of amount,” reducing upfront costs for travellers.

Relief for education and medical remittances

Families sending money abroad for education and medical treatment will also benefit. The Finance Minister proposed lowering TCS on remittances under the Liberalised Remittance Scheme for education and medical purposes from 5 per cent to 2 per cent.

The reduction is expected to ease cash flow pressures on households funding overseas tuition fees or healthcare, making essential cross-border payments more affordable at the point of transfer.

Property transactions made simpler

To address a long-standing compliance hurdle, the Budget simplified TDS rules for NRI property sales. Tax deduction and deposit on the sale of immovable property by a non-resident will now be carried out using the buyer’s PAN-based challan, removing the requirement for resident buyers to obtain a Tax Deduction and Collection Account Number.

The change is expected to significantly streamline property transactions involving NRIs and reduce procedural delays.

One-time foreign asset disclosure window

A notable compliance reform is the introduction of a one-time six-month Foreign Asset Disclosure Scheme aimed at students, young professionals, technology workers and relocated NRIs.

Under the scheme, undisclosed foreign income or assets up to Rs 1 crore can be regularised by paying 30 percent tax along with an additional 30 percent, with full immunity from prosecution. For assets acquired but not declared up to Rs 5 crore, immunity from penalty and prosecution will be available on payment of a Rs 1 lakh fee.

The initiative is designed to resolve legacy disclosure issues without exposing individuals to criminal proceedings.

Building on earlier remittance reforms

The latest changes build on reforms announced in previous Budgets. In recent years, the government raised the exemption threshold for TCS on foreign remittances under LRS to Rs 10 lakh per financial year, allowing smaller transfers to be made without upfront tax collection.

Last year’s Budget also removed TCS on education loans taken under LRS, offering further relief to students pursuing higher studies abroad through approved loans.