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Experts note that the real impact of the proposal will depend on how clearly the notified schemes are defined and how smoothly the rules are implemented
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If executed well, the measure could encourage more global experts and NRI professionals to contribute to India’s development without tax-related uncertainty
India’s Union Budget 2026 has proposed a major tax relief aimed at attracting overseas professionals and skilled non-resident Indians (NRIs) to work on short- and medium-term projects in the country. Under the new proposal, eligible non-residents visiting India to provide services under government-notified schemes will receive a five-year tax exemption on their overseas income.
The exemption will start from the year of the individual’s first visit to India for rendering such services. Importantly, it will apply only to income that is earned or arises outside India. Any income sourced within India will continue to be taxed as per existing laws.
To qualify for this benefit, the individual must have been a non-resident for five consecutive tax years immediately before the year of their first visit. This condition is meant to ensure that the incentive is targeted at genuine overseas professionals and not frequent visitors or returning residents.
Tax expert CA Himank Singla, Partner at SBHS & Associates Chartered Accountants, says the proposal is designed to provide tax certainty and make India more attractive for foreign talent linked to specific government programmes. According to him, the move recognises that limited physical presence in India for defined projects should not automatically expose professionals to taxation on their global income.
The exemption is carefully limited in scope. Only foreign-sourced income qualifies, which helps India protect its right to tax income earned within the country. In addition, the benefit is linked strictly to Central Government–notified schemes and prescribed conditions. This gives the government control over which sectors and projects are covered, while avoiding misuse.
Experts note that the real impact of the proposal will depend on how clearly the notified schemes are defined and how smoothly the rules are implemented. If executed well, the measure could encourage more global experts and NRI professionals to contribute to India’s development without tax-related uncertainty.
