Table of Contents
A clear, fact-checked breakdown of what Budget 2026–27 actually changed for NRIs — what’s live today, what’s still pending, and exactly who each provision applies to.
Budget 2026–27 was presented on 1 February 2026 and passed into law as the Finance Act, 2026. Since then, several NRI-relevant provisions have been notified, clarified, or operationalised — some as recently as this week. This guide is verified against the Central Board of Direct Taxes (CBDT), the Reserve Bank of India (RBI), and the Finance Act text itself, so you know exactly what applies to your situation and by when.
2%
New TCS on overseas education/medical remittance
10% / 24%
New NRI equity caps (individual / aggregate)
₹1 Cr
FAST-DS asset ceiling (small-taxpayer category)
31 Dec 2026
FAST-DS declaration deadline — no extension
Live as of today — 16 August
The Foreign Assets of Small Taxpayers – Disclosure Scheme (FAST-DS) 2026 rules were notified by the CBDT this week. The scheme has come into force from 16 August 2026, with declarations open until 31 December 2026. If you’ve been sitting on a decision about unreported foreign assets, the clock is now actually running — see Section 1.
1 FAST-DS 2026: The Foreign Asset Disclosure Window
The Finance Act, 2026 (Chapter IV, Sections 130–144) created a one-time, time-bound disclosure scheme for taxpayers with unreported foreign assets or income. The CBDT notified the FAST-DS Rules, 2026 this week — the scheme takes effect from 16 August 2026 and closes on 31 December 2026.
Who this actually covers
FAST-DS is a capped, categorised scheme for “small taxpayers” — mainly residents, including returned or returning NRIs, whose foreign assets trace back to a period when they were Indian tax residents. If you’ve always been non-resident, with assets built entirely while non-resident, you generally have no Indian disclosure obligation to begin with. Check the two categories below to see exactly where you stand.
Category 1 — never taxed, never disclosed: Foreign assets or income that were never reported and never taxed in India. Aggregate value (valued as on 31 March 2026) must not exceed ₹1 crore. Payable: 60% of value (30% tax + 30% additional levy) — down from the standard 120% liability under the Black Money Act, 2015.
Category 2 — taxed income or non-resident-period assets, just not disclosed in Schedule FA: Foreign assets bought out of already-taxed income, or acquired while you were genuinely non-resident, but never reported in the ITR’s foreign-asset schedule. Aggregate value up to ₹5 crore. Payable: a flat fee of ₹1 lakh — no percentage-of-value tax.
Who typically qualifies: Returned/returning NRIs and OCIs now classed as ordinary residents, former students with dormant foreign bank accounts, employees with unreported ESOPs/RSUs from foreign employers, and professionals who worked abroad and later became India tax residents.
How to file: Electronically via Form 1 on the Income Tax e-filing portal (incometax.gov.in). Valuation date for all assets is fixed at 31 March 2026. Supporting documents and valuation reports must be uploaded where applicable; the tax authority communicates the payable amount via Form 2 after verification.
If you miss the deadline
Standard Black Money Act provisions apply in full — 30% tax plus a 90% penalty (120% total), with criminal prosecution possible under Sections 49–50 of the Act. There is no indication this window will reopen or extend. Filing in the wrong category, or with an incorrect valuation, also voids the immunity entirely.
Action: If you have foreign bank accounts, ESOPs/RSUs, or overseas assets tied to a period when you were an Indian tax resident, get a CA to confirm which category you fall into — and file well before 31 December 2026.
2 Property Sales: PAN-Based TDS Replaces TAN
The new Common Landing Portal at unclaimedassetsportal.in acts as a single front door — it does not hold your data itself, but directs you to the right regulator’s platform based on what you are looking for. Here are the five portals, what they cover, and how to use each one.
What changed: An amendment to Section 397(1)(c) of the Income-tax Act, 2025 removes the requirement for a resident individual or HUF buyer to obtain a TAN before deducting TDS on a property purchase from an NRI. TDS will instead be deducted and deposited using the buyer’s PAN, through a challan-cum-statement mechanism — the same process already used for resident-to-resident property deals (Form 26QB-style).
Effective date: 1 October 2026. Until then, a TAN is still mandatory for such purchases.
What stays the same: TDS rates are untouched. Long-term capital gains on NRI property sales still attract TDS based on the applicable rate under Section 112 (12.5% without indexation, plus surcharge and cess) or the withholding rate under Section 195, depending on the transaction. This is a paperwork simplification, not a tax cut.
A detail worth flagging: The relief applies to individual and HUF buyers only — companies and firms purchasing from an NRI still need a TAN. And if the seller’s PAN isn’t valid or Aadhaar-linked, the buyer must still deduct TDS at 20% (or the applicable rate, whichever is higher) regardless of this change.
Action: Update your property-sale checklist, but don’t tell prospective buyers TAN is gone until after 1 October 2026. Keep your PAN active and Aadhaar-linked well before any sale — that one detail affects your TDS rate far more than the TAN change does.
3 TCS Cut to 2% — But Check Who It Actually Helps
What changed: TCS on remittances under the Liberalised Remittance Scheme (LRS) for education and medical treatment purposes, above the existing ₹10 lakh threshold, has been cut from 5% to 2%. TCS on overseas tour programme packages has been rationalised to a flat 2%, with no minimum-amount threshold (previously up to 20% on larger packages).
Effective date: 1 April 2026 (FY 2026–27) — this is not retroactive to remittances made earlier in the year.
Who this actually benefits
LRS applies to resident individuals remitting money abroad, not to NRIs remitting their own funds. In practice, this cut mainly benefits Indian-resident parents or family paying for an NRI relative’s overseas education or medical treatment — not an NRI sending money into or out of India directly. If you’re an NRI repatriating funds from an NRO account, this TCS change does not apply to that transaction.
What is unchanged: The ₹10 lakh threshold itself was set in Budget 2025, not this Budget. Remittances for other purposes — family maintenance, gifts, or general investment abroad — remain at 20% TCS above ₹10 lakh. Education-loan-funded remittances remain fully exempt from TCS, as they have been since Budget 2025.
Action: If your parents or family in India fund your education or medical treatment abroad, confirm with their bank that the 2% rate applies from 1 April 2026 onward. TCS is always adjustable against final tax liability — it is not an extra cost, just an upfront cash-flow difference.
4 ITR Compliance: Revised Returns Get More Time
Know the difference
The deadline extension applies to revised returns only. The belated-return deadline is unchanged — it remains 31 December of the assessment year. Treat these as two separate clocks, not one.
Revised return deadline: Extended from 31 December to 31 March of the assessment year (via an amendment to Section 139(5) of the old Act, mirrored in Section 263(5) of the Income-tax Act, 2025). A nominal fee applies if you revise after 31 December — it isn’t free for the full extended window.
Belated return deadline: Unchanged — still 31 December of the assessment year.
Updated returns during reassessment: Taxpayers can now file an updated return even after reassessment proceedings have begun, by paying an additional 10% of the aggregate tax and interest over and above the normal updated-return cost. This is genuinely useful for NRIs who discover a reassessment notice after being abroad.
Minor defaults decriminalised: Non-production of books/documents, TDS-in-kind defaults, and certain other lapses where the tax amount doesn’t exceed ₹10 lakh have been moved from prosecution risk to a fines/fees regime.
Reassessment notice response time: A minimum 30-day window to respond is now guaranteed — previously there was no prescribed minimum, only a 3-month maximum. Useful if you’re travelling or juggling time zones.
Action: Use the extended window to revise past filings, but don’t miss 31 December if you still need to file a belated return for the first time — that deadline hasn’t moved. File early to avoid the nominal fee that kicks in after 31 December.
5 MAT: A Corporate Change, Not a Personal Tax Break
Does this apply to you?
Minimum Alternate Tax (Section 115JB) applies to companies, not to an individual NRI’s personal income tax return. If you’re a salaried NRI, retiree, or portfolio investor, this section does not change your ITR — read on only if you own or operate a qualifying foreign business.
What changed: MAT becomes a final tax (no further credit carry-forward) for companies remaining in the old tax regime, and the rate drops from 15% to 14% — effective 1 April 2026. Separately, MAT exemption for non-resident businesses taxed on a presumptive basis has been widened to include two more categories: operators of cruise ships, and providers of services/technology for setting up electronics-manufacturing facilities in India.
Who this actually helps: NRIs and OCIs who own or operate a qualifying non-resident business — cruise operations, shipping, aircraft leasing, or electronics-manufacturing support — taxed under India’s presumptive-taxation provisions. It has no bearing on salary income, pension, rental income, mutual funds, or direct equity holdings.
Action: If none of your income comes through a foreign business taxed on a presumptive basis in India, this one doesn’t apply to your personal filing.
6 NRI Equity Investment Caps: Already Live, Not Just Proposed
What changed: Under the Portfolio Investment Scheme (PIS), the cap on how much of a single listed Indian company an individual NRI or OCI can hold has been raised from 5% to 10% of paid-up equity capital. The combined ceiling for all NRIs/OCIs together in one company has been raised from 10% to 24%.
Status: This was announced in the Budget on 1 February 2026 and has since been operationalised — the RBI issued the formal notification raising these limits on 5 June 2026. It is in force now, not a pending proposal.
No SEBI registration required: The route continues to work through your existing NRI demat/PIS bank account setup — no separate market-regulator registration is needed to use the higher headroom.
Action: If you’ve been capped out at 5% in a stock you have conviction in, check with your PIS-linked bank or broker now — the higher ceiling is already usable, not something to wait for.
7 Other Genuine Changes Worth Knowing
- 5-year tax exemption for returning professionals (narrow eligibility): NRIs or diaspora professionals taking up roles in India under a government-notified scheme can get a 5-year exemption on their foreign-sourced income, provided they were non-resident for the five consecutive years before their first visit under that scheme. It excludes Indian-sourced income and only applies to schemes the CBDT specifically notifies — not a general “moving back to India” tax holiday. Effective from AY 2027-28; watch for the CBDT’s list of qualifying schemes.
- Assessment and penalty proceedings integrated into a single common order, cutting duplicate hearings — useful for NRIs who currently have to engage separately with each. Effective 1 April 2027.
- Minimum 30-day response window for reassessment notices (see Section 4) — a genuine, immediate procedural win for anyone managing Indian tax matters from a different time zone.
Effective Dates at a Glance
| Change | Effective Date | Status (as of 16 Aug 2026) |
|---|---|---|
| FAST-DS 2026 disclosure window | 16 Aug – 31 Dec 2026 | LIVE NOW |
| TCS cut to 2% (education/medical/tour) | 1 Apr 2026 | In force |
| Revised return deadline → 31 March | AY 2026-27 onward | In force |
| Updated return after reassessment begins | 1 Mar 2026 | In force |
| MAT rate cut to 14% / final tax (companies) | 1 Apr 2026 | In force |
| NRI/OCI equity cap 10% / 24% | RBI notified 5 Jun 2026 | In force |
| PAN-based TDS on NRI property sale (no TAN) | 1 Oct 2026 | Upcoming |
| 5-year exemption for returning professionals | AY 2027-28 | Awaiting CBDT scheme list |
| Assessment-penalty common orde | 1 Apr 2027 | Upcoming |
NRI Action Checklist
- Unreported foreign assets/income from a period you were India-resident → confirm your FAST-DS category with a CA before 31 December 2026.
- Selling Indian property after 1 October 2026 → tell an individual/HUF buyer TAN is no longer required, but keep your PAN Aadhaar-linked.
- Family remitting money abroad for your education or medical care → confirm their bank applies 2% TCS, not the older 5%, from 1 April 2026.
- Missed a return for AY 2026-27 → belated return is still due 31 December; only a revised return gets until 31 March (with a fee after 31 Dec).
- Holding Indian listed shares through PIS → ask your bank/broker about the new 10% individual / 24% aggregate headroom, already active.
- Own or run a foreign shipping, cruise, or electronics-manufacturing-support business → check the widened MAT exemption; otherwise skip Section 5.
- Considering a work relocation to India → ask your employer whether the assignment falls under a CBDT-notified scheme for the 5-year foreign-income exemption.
The Golden Rule
FAST-DS 2026 is not a blanket amnesty for every NRI — it is a capped, time-bound scheme for specific categories of small taxpayers. If your foreign assets exceed the ₹1 crore / ₹5 crore ceilings, or were never linked to a period of Indian tax residency, this scheme does not cover you, and standard Black Money Act penalties of up to 120% plus prosecution risk remain fully in force. Verify your eligibility with a qualified CA before the 31 December 2026 deadline — don’t assume a headline applies to your specific situation.
Key Takeaway
Budget 2026–27 delivers real, verifiable relief for NRIs — a capped disclosure window, simpler property TDS paperwork, a genuine TCS cut for education and medical remittances, more breathing room on revised returns, and materially higher equity investment headroom that’s already in force. But the size of the benefit depends entirely on which category you fall into. Before acting on any Budget 2026 claim you read elsewhere, check three things: your residency history when the asset or income arose, the exact rupee thresholds involved, and whether the provision is already in force or still awaiting a CBDT notification.
Quick-Reference Helplines
| Purpose | Contact | Notes |
|---|---|---|
| Income Tax e-filing / CPC / refunds | 1800 103 0025 / 1800 419 0025 | 8 AM–8 PM IST |
| International callers (Income Tax) | +91-80-46122000 / +91-80-61464700 | For NRIs calling from abroad |
| PAN / TAN queries (NSDL/Protean) | +91-20-27218080 | PAN-Aadhaar linking, corrections |
| Cyber fraud (incl. FAST-DS impersonation scams) | 1930 / cybercrime.gov.in | Report within 24 hrs for best recovery odds |
