New Delhi: In a significant announcement during the Union Budget 2026-27 presented in the Lok Sabha on Sunday, Finance Minister Nirmala Sitharaman increased the investment limit for Non-Resident Indians (NRIs) and other foreign investors in Indian listed companies.
Previously, an individual NRI could hold up to 5-10 percent of a company’s paid-up capital. The new budget doubles the limit for individual NRIs to 10 percent and raises the overall NRI investment cap to 24 percent.
This change simplifies the investment process for NRIs and foreign residents, who earlier had to invest mainly through Foreign Portfolio Investor (FPI) routes or specific NRI channels. Now, under a regulated portfolio investment scheme, NRIs and foreign citizens can directly invest in Indian stocks. The objective is to improve market access and increase participation from overseas investors.
Additionally, the Finance Minister announced relief for foreign citizens residing in India for five years, offering exemptions on income earned outside India.
On customs duties, the tariff on personal imports has been reduced from 20 percent to 10 percent. The Tax Collected at Source (TCS) on foreign tour packages has also been lowered from 5/20 percent to 2 percent.
The budget retained the existing structure of income tax but introduced measures to ease tax filing and provide relief to taxpayers. The deadline for filing income tax returns has been extended from December 31 to March 31 with a nominal fee. Different return forms will have separate filing dates: ITR-1 and ITR-2 returns remain due by July 31, while non-audited businesses and trusts have until August 31.
In another relief, interest received from motor accident claims awarded by the Motor Accident Claims Tribunal will now be exempt from income tax and will not be subject to Tax Deducted at Source (TDS).
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