Budget 2026: Every NRI Change — What Goes Live on April 1

Budget 2026-27 was presented on February 1, 2026. For NRIs, it is not a budget of tax rate cuts — slabs are unchanged. But it is a budget of structural reforms, compliance resets, and two critical deadlines that every NRI should have circled: April 1, 2026 (when the new Income Tax Act goes live) and the FAST-DS window opening shortly after.

Here is every change that matters, with precise effective dates so you know exactly what to act on and when.

What Budget 2026 Changed for NRIs

Six changes stand out from Budget 2026-27 for the NRI community:

1. New Income Tax Act 2025 replaces the 64-year-old Income Tax Act 1961 — live April 1, 2026
2. FAST-DS 2026 — a 6-month amnesty window for anyone with unreported foreign assets
3. PIS individual limit doubled from 5% to 10% per company — live April 2026
4. TAN abolished for NRI property sale TDS — live October 2026
5. LRS TCS cut to 2% on education, medical, and travel remittances — live October 2026
6. ITR revision deadline extended to March 31 — live from AY 2026-27

The New Income Tax Act 2025 — Live April 1, 2026

The Income Tax Act 2025 comes into force on April 1, 2026, replacing the Income Tax Act 1961, which had been amended over 3,000 times since it was enacted. This is the most significant structural reform to Indian direct tax law in over six decades.

What actually changes for NRIs?

• New ITR forms — redesigned to reflect the Act's new section numbering. Your CA or the IT portal will guide you through the new layout for AY 2026-27
• Cleaner residential status rules — the 182-day and 60-day tests for NRI classification are retained but written with greater clarity, reducing disputes
• Penalty reform — procedural non-compliance (missing a filing, wrong form, late TDS challan) now attracts fixed graded fees instead of criminal prosecution risk
• Virtual Digital Assets (crypto) treatment is codified explicitly — relevant for NRIs who held or traded crypto linked to Indian accounts

What does NOT change?

• Tax rates, slabs, and NRI exemptions are identical — your April 2026 tax bill is the same as it would have been under the old Act
• DTAA relief, Schedule FA disclosure requirements, and NRO/NRE tax treatment are all carried over unchanged
• The new Act is renumbered — Section 9 (income deemed to accrue in India) becomes a different section number, but the legal content is the same

FAST-DS 2026 — The Amnesty Window NRIs Cannot Miss

The Foreign Assets of Small Taxpayers Disclosure Scheme 2026 (FAST-DS) is the single most consequential Budget 2026 announcement for the NRI community. Tax experts are calling it a once-in-a-decade compliance reset opportunity.

Why does this matter so much?

Under the Black Money (Undisclosed Foreign Income and Assets) Act 2015, failing to disclose a foreign asset in Schedule FA of your Indian ITR carries a penalty of ₹10 lakh per year — even if the asset earned no income and you paid all due taxes. Many NRIs — especially tech professionals with ESOPs/RSUs, students who opened foreign bank accounts, and returning residents with dormant overseas accounts — have unknowingly accumulated years of Schedule FA non-compliance.

FAST-DS Category A — Undisclosed Income or Assets

For assets or income not offered to tax in India, up to ₹1 crore:

• Pay 30% tax on the fair market value of the asset or undisclosed income
• Pay an additional 30% charge in lieu of penalty
• Total effective cost: ~60% of the asset value — still far cheaper than the 120% liability under the standard Black Money Act plus prosecution risk
• Prosecution is fully waived on payment

FAST-DS Category B — Technical Reporting Lapses

For assets where tax was paid on the income but the asset was never declared in Schedule FA:

• Pay a flat fee of ₹1 lakh per asset
• Prosecution waived entirely
• This is specifically designed for: NRIs who declared their ESOP income but never filed Schedule FA; professionals who paid tax on foreign salary but omitted the overseas bank account; returning NRIs who became residents but kept a foreign account open

Who should use FAST-DS?

• Any NRI who has ever held a foreign bank account and is not 100% certain it was in Schedule FA every year
• Tech professionals in the US, UK, or Singapore with unvested or vested ESOPs/RSUs from previous employers
• Returning NRIs who became residents and forgot to close or continue disclosing overseas accounts
• Anyone who inherited overseas property or received foreign gifts

The scheme opens within weeks of April 1 (exact date to be notified by the Central Government) and runs for 6 months. Once it closes, CBDT is expected to deploy international tax information exchange (OECD Common Reporting Standard) to aggressively pursue remaining non-disclosures. Act now.

PIS Individual Investment Limit Doubled — April 2026

Budget 2026 raises the individual NRI/PROI (Person Resident Outside India) investment ceiling in any single listed Indian company from 5% to 10% of paid-up capital. The aggregate ceiling for all NRIs and OCIs together moves from 10% to 24%.

This is meaningful for NRIs who had been blocked from increasing positions in Indian companies they believe in — particularly in mid-cap and small-cap names where the previous 5% ceiling was regularly hit by active NRI investors. Contact your broker or DP to confirm updated PIS documentation requirements.

NRI Property Sale TDS — TAN Abolished (October 2026)

Until Budget 2026, any Indian resident buying property from an NRI was required to apply for a Tax Deduction Account Number (TAN) — even for a one-time transaction. This caused weeks of delays, technical defaults, and often deterred buyers from purchasing NRI-owned property.

From 1 October 2026, resident buyers can deduct and deposit TDS using their PAN-based challan — the same process used for resident-to-resident property sales. Key clarifications:

• TDS rates unchanged — still 20% on LTCG (property held over 24 months), 30% on STCG
• The change is procedural — buyers simply file the challan-cum-statement with their PAN instead of a TAN
• NRI sellers can still apply for a lower TDS certificate under Section 197 (Form 13) to reduce the deduction below 20%
• Until October 1, 2026, the existing TAN process remains in effect

LRS TCS Cut to 2% — October 2026

Tax Collected at Source (TCS) on overseas remittances under the Liberalised Remittance Scheme is being cut significantly from 1 October 2026:

Note: TCS is not an additional tax — it is adjustable against your final income tax liability. But it is upfront cash outflow that blocks liquidity until you file your ITR. The reduction improves cash flow, especially for NRI parents funding children's overseas education.

Extended ITR Deadlines — AY 2026-27 Onwards

Two deadline changes from Budget 2026 that directly help NRIs managing filings from overseas:

• Revised/belated return deadline extended to March 31 (was December 31). For AY 2026-27, you now have until 31 March 2027 to file a revised or belated return, with a nominal late fee for revisions after December.
• Updated returns during reassessment — NRIs can now file an updated ITR even after reassessment proceedings have commenced, by paying an additional 10% tax. Previously this was not permitted.
• ITR-1 and ITR-2 filers continue to have the standard 31 July original deadline. Non-audit ITR-3/4 filers get until 31 August.

All Effective Dates at a Glance

Your April 2026 Action Checklist

1. Review Schedule FA in your last 3 ITRs. List every foreign bank account, ESOP grant, RSU vesting, overseas property, and foreign investment. Cross-check against what was filed. If anything is missing, FAST-DS is your window.
2. Engage a CA with FAST-DS expertise immediately. The scheme opens within weeks of April 1. Category assessment, eligibility verification, and declaration filing take time. Don't wait until the window is half-closed.
3. Update your broker on PIS limits. If you've been close to the 5% ceiling in any Indian company, the new 10% limit opens headroom from April 2026. Check with your DP.
4. Check NRI ITR forms for AY 2026-27. The Income Tax Department will notify new forms under the Income Tax Act 2025. Your existing CA workflow will need an update.
5. Plan property sale timing. If you're selling Indian property, the TAN simplification kicks in October 2026 — but Form 13 (lower TDS certificate) remains available and is worth applying for regardless.
6. Small foreign assets ≤ ₹20 lakh: The Black Money Act now waives prosecution for non-immovable foreign assets under ₹20 lakh (effective 1 March 2026). But tax, interest, and penalty still apply — so this is relief from prosecution, not from payment.