New Delhi: Finance Minister Nirmala Sitharaman on Sunday unveiled a sweeping set of reforms aimed at the Indian diaspora, significantly easing investment bottlenecks and simplifying tax compliance for Non-Resident Indians (NRIs) in the Union Budget 2026.

The move marks a strategic shift to deepen India’s capital markets by tapping into the wealth of the global Indian community, estimated at over 32 million people.

Equity Investment Limits Doubled

In a major policy overhaul, the government has moved to attract more stable, long-term capital into the domestic stock market by doubling the investment ceilings for Persons Resident Outside India (PROIs).

  • Individual Cap: The investment limit for an individual NRI in a single listed Indian company has been raised from 5% to 10%.
  • Aggregate Cap: The total combined holding for all NRIs in a company has been increased from 10% to 24%.

Market analysts suggest this move will significantly boost liquidity and allow overseas Indians to take more substantial positions in India’s "Viksit Bharat" growth story.

Relief on Education and Health Remittances

Addressing long-standing demands from students and families, the Finance Minister announced a sharp reduction in Tax Collected at Source (TCS) for essential overseas spending.

  • TCS Reduction: The tax rate for remittances under the Liberalised Remittance Scheme (LRS) for education and medical treatment has been slashed from 5% to 2%.
  • Threshold Increase: The exemption threshold for such remittances was raised to ₹10 lakh, providing immediate cash-flow relief to thousands of middle-class families supporting students abroad.

Simplifying Real Estate & Compliance

The Budget also targeted the procedural "red tape" that has historically plagued NRIs selling property in India.

  • Property TDS Overhaul: Previously, resident buyers were required to obtain a Tax Deduction Account Number (TAN) to deduct tax on property purchases from NRIs. Sitharaman announced that buyers can now deposit this tax using a PAN-based challan, removing a significant barrier to such transactions.
  • Foreign Asset Disclosure: A one-time, six-month window was introduced for small taxpayers, including students and tech professionals who have recently relocated, to regularise previously undisclosed overseas assets with immunity from heavy penalties.

"Our aim is to make India an attractive and hassle-free destination for the global Indian community to invest their capital and talent," Sitharaman told Parliament.

Modernising Legal Frameworks

Beyond immediate tax relief, the government proposed a comprehensive review of the Foreign Exchange Management Act (FEMA) non-debt instrument rules. This modernisation is intended to reduce litigation and make the regulatory environment more predictable for foreign investors.