Taxmann's Analysis | Union Budget 2026 – Key Tax Proposals for NRIs and Foreign Investors
Foreign investors and NRIs closely track the Union Budget for signals on India’s tax policy and investment environment. Budget announcements on capital gains, cross-border income taxation, and compliance requirements can significantly influence investment decisions. With the Budget 2026 now announced, this article examines the key proposals relevant to NRIs and foreign investors.
Key Changes:
1. Non-resident individuals shall be exempt from tax on foreign-sourced income for five consecutive tax years when rendering services in India under a notified Government scheme.
2. Non-residents opting for presumptive taxation for cruise ship business and for setting up electronics manufacturing facilities shall be excluded from the applicability of Minimum Alternate Tax.
3. Income of a foreign company from providing capital goods, equipment or tooling to an electronic goods contract manufacturer located in a customs bonded area shall be exempt from tax up to tax year 2030-31.
4. Income of a foreign company arising from procuring data centre services from a specified Indian data centre shall be exempt from tax up to 31-03-2047.
5. The definition of “specified fund” in Note 1(g) to Schedule VI of the ITA 2025 has been amended to align with section 10(4D) of the ITA 1961.
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