With the Union Budget 2026–27 set to be presented on February 1, Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs) are closely watching for measures that simplify taxation and encourage investment in India. Experts believe the budget could restore clarity and reduce compliance burdens, particularly regarding capital gains on equities, mutual funds, and immovable property. NRIs are also hoping for clearer rules on residential status, smoother processes for claiming tax refunds, and easier access to credit for taxes paid abroad, along with consistent application of Double Taxation Avoidance Agreements.
There is significant anticipation around the simplification of residency rules. Many industry representatives, including the Bombay Chambers of Commerce and Industry, have suggested reverting to the earlier 182-day threshold without linking it to income levels, arguing that the 120-day rule combined with a ₹15 lakh India-sourced income condition has made compliance complicated. Reverting to the simpler framework could encourage NRIs and PIOs to spend more time in India, boosting travel, hospitality, and consumption, while removing confusion arising from the graded residency system.
Investment-related expectations are also high. NRIs are looking for more liberal norms to invest in real estate, start-ups, alternative investment funds, and debt instruments. Targeted incentives in sectors like infrastructure, renewable energy, manufacturing, and start-ups could further strengthen diaspora confidence. At the same time, easier processes for banking, including faster digital KYC and smoother NRE/NRO account management, along with streamlined repatriation of funds, would make financial interactions more convenient.
Overall, NRIs and tax experts are hoping Budget 2026 delivers clarity, predictability, and a welcoming framework that supports their participation in India’s economic growth, while ensuring taxation remains fair, transparent, and easy to comply with.
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