Union Budget 2026

Let's cut through the noise. This guide walks through every Budget change from 2024, 2025, and 2026 that affects your money in India. We'll use real numbers, real examples, and skip the jargon.

The individual NRI cap per company just doubled. You can now own up to 10% of any Indian company through the PIS route, up from the earlier 5% limit.

Here's what that means in practice. If Infosys has 100 crore shares outstanding, you can now own up to 10 crore shares instead of 5 crore. Most NRIs will never hit this ceiling. If you own Rs 50 lakh worth of TCS or Rs 2 crore in Reliance, you're nowhere close.

But this headroom matters in two scenarios. First, if you're concentrated in mid-cap or small-cap stocks. A company with a Rs 500 crore market cap has fewer shares to go around. The old 5% limit meant you could own only Rs 25 crore worth. The new 10% limit gives you Rs 50 crore of room. Second, if you're part of a pooled offshore fund that invests in Indian equities, that fund now has double the capacity before hitting individual stock limits.

The change came through a SEBI notification after Budget 2025 and applies to fresh purchases as well as existing holdings. You don't need to do anything if you're already holding 6% or 8% of a company. You're grandfathered in. This simply means more flexibility going forward, especially if you're building serious concentrated positions in Indian growth stories.

Tax Collected at Source on education and medical payments abroad just got cheaper. Starting April 1, 2026, the TCS rate drops from 5% to 2%. The threshold where TCS kicks in stays at Rs 7 lakh per financial year.

Let's work through a real example. Your child is studying in the US. You need to remit $20,000 for tuition this semester. At an exchange rate of Rs 85 per dollar, that's Rs 17 lakh. You've already sent Rs 10 lakh earlier in the year for other expenses, so your total for the year is Rs 27 lakh.

The TCS applies only on the amount above Rs 7 lakh. So the taxable base is Rs 20 lakh. At the new 2% rate, the bank will collect Rs 40,000 as TCS. Under the old 5% rate, it would have been Rs 1 lakh. You save Rs 60,000 in upfront cash.

Wait, it's not really a saving. TCS isn't a tax. It's a collection mechanism. You claim it back when you file your Indian tax return. But here's why the reduction matters: liquidity. You don't have to park an extra Rs 60,000 with the government for months waiting for your refund. If you're sending multiple remittances for education or medical treatment, that cash stays in your account where it belongs.

One important detail: this 2% rate applies only to education and medical expenses. Other LRS remittances, like buying foreign property or investing abroad, still attract the standard TCS rates. For those categories, verify the latest notification on incometax.gov.in because TCS rules change frequently.

If you have a big education payment coming up, time it after April 1, 2026. The difference between 5% and 2% on a Rs 50 lakh remittance is Rs 86,000 in upfront collections.

Long-term capital gains tax on equity got more expensive in Budget 2024, and it's still in effect. The rate climbed from 10% to 12.5%, and the exemption threshold rose from Rs 1 lakh to Rs 1.25 lakh per financial year.

Here's the math. You bought shares of HDFC Bank five years ago. You sell them this year and book a profit of Rs 10 lakh. Under the old regime, you paid 10% on Rs 9 lakh (after the Rs 1 lakh exemption), which came to Rs 90,000 in tax.

Under the new regime, you pay 12.5% on Rs 8.75 lakh (after the Rs 1.25 lakh exemption). That's Rs 1,09,375 in tax. You pay Rs 19,375 more.

The higher exemption limit helps if your annual gains are small. If you book Rs 2 lakh in LTCG, you paid Rs 10,000 earlier. Now you pay 12.5% on Rs 75,000, which is Rs 9,375. You actually save Rs 625.

But if you're an NRI with a serious equity portfolio, booking gains in the Rs 5 lakh to Rs 50 lakh range, the 2.5 percentage point rate hike hurts. A Rs 50 lakh gain now costs you Rs 6.23 lakh instead of Rs 4.99 lakh. That's Rs 1.24 lakh extra.

As an NRI, remember that India taxes you on capital gains from Indian assets regardless of where you live. If you're also taxed in your country of residence, you can claim Foreign Tax Credit under the DTAA to avoid double taxation. But the Indian tax bill just went up, which means you're claiming credit on a higher base.

Short-term capital gains on equity saw an even sharper jump. The rate went from 15% to 20% in Budget 2024, and it applies to all equity sold before you complete one year of holding.

If you bought and sold shares within ten months and made Rs 5 lakh in profit, you paid Rs 75,000 earlier. Now you pay Rs 1 lakh. That's Rs 25,000 extra on the same gain.

This change discourages short-term trading for NRIs. You're already dealing with time zone mismatches, slower trade execution if you're using an international brokerage linked to your NRE account, and currency risk if you're thinking in dollars or dirhams. Now the tax bite is bigger.

The message from the government is clear: if you're going to invest in Indian equities, hold for the long term. One year and one day gets you the lower LTCG rate. Anything shorter costs you 20% off the top.

For NRIs who day-trade or swing-trade Indian stocks, this is a real hit. Between brokerage, STT, GST, and now 20% STCG, your gains get eaten up fast. Unless you're consistently beating the market by wide margins, you're better off buying quality stocks and forgetting about them for a few years.

The new income tax regime is now the default for all taxpayers, including NRIs. If you don't explicitly choose the old regime when filing, you're automatically slotted into the new one.

Here's why this matters for NRIs. The old regime had lower tax rates but required you to claim deductions under sections like 80C, 80D, HRA, and home loan interest. Most NRIs don't have these deductions. You're not paying rent in India to claim HRA. You're not buying ELSS or PPF to claim 80C. You're not paying Indian health insurance premiums.

The new regime has higher tax rates but no deductions required. For most NRIs, it works out better.

Let's walk through an example. You're an NRI earning Rs 12 lakh in India from rental income, capital gains, and interest on an NRO fixed deposit.

Under the old regime, you pay tax on slabs: zero up to Rs 2.5 lakh, 5% from Rs 2.5 to 5 lakh, 20% from Rs 5 to 10 lakh, and 30% above Rs 10 lakh. Your tax comes to Rs 1.25 lakh plus Rs 1 lakh plus Rs 60,000, totaling Rs 2.85 lakh. Add 4% cess, and your final tax is Rs 2,96,400. But wait, you can claim deductions. If you invest Rs 1.5 lakh in 80C and Rs 25,000 in 80D, your taxable income drops to Rs 10.25 lakh, and your tax falls to around Rs 1.87 lakh.

Under the new regime, the slabs are different: zero up to Rs 3 lakh, 5% from Rs 3 to 7 lakh, 10% from Rs 7 to 10 lakh, 15% from Rs 10 to 12 lakh, 20% from Rs 12 to 15 lakh, and 30% above Rs 15 lakh. On Rs 12 lakh, you pay Rs 20,000 on the first slab, Rs 30,000 on the second, and Rs 30,000 on the third. Total tax is Rs 80,000 plus cess, so Rs 83,200.

You save over Rs 1 lakh by using the new regime, assuming you don't have those deductions lined up. Most NRIs don't. So the new regime as default is actually a gift, not a burden.

Check your specific situation. If you own property in India and pay a home loan, or if you have substantial 80C investments, the old regime might still win. But for straightforward rental and investment income, the new regime is cleaner and cheaper.

Securities Transaction Tax on futures and options went up in Budget 2024. The STT on sale of options climbed from 0.0625% to 0.1% of the premium. On futures, it rose from 0.0125% to 0.02%.

If you trade 100 lots of Nifty options and the total premium is Rs 10 lakh, you now pay Rs 10,000 in STT instead of Rs 6,250. That's Rs 3,750 extra per trade cycle.

Here's the bigger point: most NRIs shouldn't be trading F&O anyway. Options and futures are complicated, require constant monitoring, and carry margin obligations that can spiral if you're not watching the market during Indian hours. If you're in New York or London or Dubai, you're asleep or at work when the Indian market is most active.

Add to that the operational mess. Most international brokerages don't offer seamless F&O trading on Indian exchanges. You need an Indian brokerage account, which requires PIS approval from your bank, KYC updates, and compliance with FEMA rules. The STT hike is just one more reason to skip F&O and stick to equity delivery or mutual funds.

If you do trade derivatives and you're paying higher STT, factor it into your break-even calculations. The tax drag on frequent F&O trading just got heavier.

Just as important as what changed is what stayed the same.

The LRS limit is still $250,000 per financial year per person. You can still remit up to a quarter million dollars abroad for any permissible purpose, including investment, education, medical treatment, or buying property. This hasn't changed in Budget 2024, 2025, or 2026.

NRE fixed deposit interest is still completely tax-free in India. If you park Rs 50 lakh in an NRE FD earning 7.5%, your Rs 3.75 lakh annual interest is exempt from Indian income tax. This remains one of the best risk-free returns available to NRIs.

DTAA treaties are unchanged. Your Double Taxation Avoidance Agreement with India, whether you live in the US, UK, UAE, Singapore, or elsewhere, still works the same way. You can claim credit for Indian taxes paid when filing in your country of residence.

Property purchase rules for NRIs are unchanged. You can still buy residential and commercial property in India without RBI approval. You just can't buy agricultural land, plantation property, or farmhouses without special permission.

FEMA account limits are unchanged. You can still maintain NRE, NRO, and FCNR accounts with no cap on the number of accounts or aggregate balances, as long as you comply with reporting requirements.

These fundamentals didn't move. If you built your financial plan around them, you're still on solid ground.

Now that you know what changed, here's what to do.

First, review your PIS holdings against the new 10% cap. If you're concentrated in any mid-cap or small-cap stock, check your percentage ownership. You now have room to add more if the investment thesis still holds.

Second, lock NRE FD rates while they're elevated. Interest rates in India are still attractive compared to developed markets. If you're earning 7% to 7.5% tax-free on NRE deposits, lock in those rates for longer tenures. When rates fall, you'll be glad you locked in.

Third, use the TCS reduction window for planned education or medical remittances. If you know you need to send $50,000 for your child's university next semester, wait until after April 1, 2026. You'll save the difference between 5% and 2% TCS, which could be Rs 1.5 lakh or more in upfront collections.

Fourth, check if the new tax regime saves you money on Indian income. Run the numbers both ways. If you don't have significant deductions, the new regime probably wins. If you do, the old regime might still be better. File accordingly.

Fifth, rethink short-term trading strategies. With STCG at 20%, the tax drag on frequent buying and selling is real. If you're trading in and out of stocks every few months, you're handing over a fifth of your gains to the tax department. Buy quality, hold long-term, and let LTCG at 12.5% work in your favor.

Finally, stay updated on TCS rule changes. The government tweaks these rates every Budget. Subscribe to updates from the Income Tax Department or use a tax advisor who tracks FEMA and tax changes for NRIs.

Your money in India just got subject to a fresh set of rules. Some help you, like the lower TCS on remittances and the higher PIS limit. Some hurt, like the LTCG and STCG hikes. The key is knowing which levers to pull and when.

All information in this guide is based on verified provisions from Union Budgets 2024, 2025, and 2026, Finance Acts, and regulatory notifications. For the most current rules and rates, consult these official sources:

For DTAA-specific queries, refer to the tax treaty between India and your country of residence, available on the Income Tax Department's international taxation section.