Simplified tax rules, double taxation relief, and easier remittance structures may attract more foreign investment, strengthen foreign exchange reserves, and improve overall market stability
As India prepares for Budget 2026, Non-Resident Indians (NRIs) are closely watching for possible relief, especially in the area of property taxation. Experts believe the upcoming budget could simplify existing tax rules and make it easier for NRIs to sell property in India, a long-standing concern for overseas investors.
At present, NRIs face far stricter and more complicated Tax Deducted at Source (TDS) rules compared to resident Indians. When a resident sells property worth more than ₹50 lakh, the buyer deducts just 1% TDS. However, in the case of NRIs, the buyer must deduct tax on the full sale value. This can be as high as 12.5% for long-term capital gains and up to 30% for short-term gains.
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This wide gap often creates cash flow problems for NRI sellers, as a large portion of their money gets locked with the tax department until refunds are processed
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The complexity also discourages buyers. Purchasing property from an NRI involves obtaining a Tax Deduction and Collection Account Number (TAN), depositing tax, and filing e-TDS returns, making the process lengthy and stressful
Experts are urging the government to introduce simpler mechanisms for NRI property transactions, similar to the “challan-cum-statement” system used for resident sellers. Such a move would reduce paperwork and legal hurdles for both buyers and sellers.
Another major concern is the Low Tax Deduction Certificate. While NRIs can apply for this to reduce TDS, the process is often slow and unpredictable. Many deals are delayed because the certificate does not arrive on time. There is hope that Budget 2026 will make this system fully digital and time-bound.
A report in hindi.oneindia.com quoted Siddharth Maurya, Founder and Managing Director of Vibhavangal Anukulakara Pvt. Ltd. He said reforms in NRI taxation could boost not only real estate but also the Indian stock market.
