The Union Budget 2026-27, presented by Finance Minister Nirmala Sitharaman, has introduced a series of measures aimed at easing compliance and widening investment access for Non-Resident Indians (NRIs) and other overseas individuals. Among the most significant changes is the simplification of tax deduction processes on property transactions with NRIs, alongside expanded equity investment opportunities.
Sitharaman, presenting her ninth consecutive Union Budget—the first to be delivered on a Sunday—outlined a regulatory reset for real estate and capital market transactions, including a long-awaited compliance relief for property buyers dealing with non-residents. The move reflects the government’s broader strategy to attract global capital, enhance transparency, and integrate NRIs into India’s growth story.
TAN Exemption Simplifies Property Transactions
Previously, resident individuals or Hindu Undivided Families (HUFs) purchasing immovable property from non-residents were required to obtain a Tax Deduction and Collection Account Number (TAN) to deduct and deposit Tax Deducted at Source (TDS). This created friction, as TAN issuance is primarily meant for corporate entities, while individuals typically operate through a Permanent Account Number (PAN).
The Budget 2026 proposes that TDS on NRI property sales will now be reported using the buyer’s PAN, aligning the process with transactions between resident parties. The change, effective from October 1, 2026, is expected to reduce transaction time, simplify registration, and lower compliance costs.
Sathish CG, Deputy Managing Director of Casagrand, welcomed the move, noting, “Doubling individual investment limits in listed Indian equities and streamlining TDS compliance through PAN not only enhance liquidity but also signal India’s continued attractiveness as a global investment destination. This is poised to catalyze demand for premium and aspirational housing, reinforcing confidence in long-term market growth.”
Equity Investments: Broadening Access for Overseas Investors
In addition to property compliance relief, the Union Budget 2026 increases access for NRIs to invest in listed Indian equities. The combined measures aim to enhance liquidity, simplify investment processes, and provide greater financial flexibility for high-net-worth individuals and the global diaspora.
Rohit Santosh, CEO of Bombay Realty (Wadia Group), highlighted the impact on global investors: “The Union Budget 2026–27 reflects a more globally attuned economic outlook, particularly for high-net-worth individuals and the Indian diaspora. Recent measures that ease the cost of overseas travel and international spending enhance financial flexibility for HNIs and NRIs, allowing them to move more seamlessly between global commitments and long-term investment decisions in India.”
These steps are expected to create a more attractive investment climate for NRIs, with positive spill over effects for India’s premium real estate markets.
Infrastructure Investment and Real Estate Confidence
Budget 2026 reinforces India’s infrastructure-led growth strategy, with public capital expenditure projected to rise to Rs. 12.2 lakh crore in FY2026-27. Experts see a direct link between these investments and real estate market confidence, particularly in Mumbai and other urban centres.
Aakash Patel, Managing Director of Atul Projects, explained, “Mumbai’s real estate market will benefit from infrastructure investment as part of India's budget. Since FY2014-15, the public capital outlay has grown from Rs. 2 lakh crores to Rs. 11.2 lakh crore (as per the BE 2025-26) with a proposal of an additional Rs. 12.2 lakh crore for FY2026-27, establishing long-term certainty and confidence in the development of cities. The creation of the Infrastructure Risk Guarantee Fund will reduce the risk of building and financing properties. An additional benefit of the government’s reduction in TDS on NRI property sales will create liquidity to enable greater global investment in the Mumbai property market.”
Patel emphasized that continued support for REITs and InvITs would further facilitate institutional investment, accelerating project completion and enhancing buyer confidence.
Streamlining Real Estate Transactions
The PAN-based TDS mechanism for NRI property sales is expected to significantly reduce administrative delays in property registration. Ankush Kaul, President – Sales, Marketing & CRM at Central Park, highlighted the benefits:
“The emphasis on infrastructure, connectivity, and policy reform aligns with the government’s broader Viksit Bharat narrative and reinforces confidence in India’s growth story. TDS on sale of immovable property by an NRI has been proposed to be deducted and deposited through resident buyers w.r.t. his/her PAN instead of requiring a Temporary Accounting Number (TAN). This is a welcoming move for NRIs as it will reduce the overall cycle time for completion of sale deals and registration of sale deeds.”
The streamlined process is expected to increase participation from overseas investors in residential, commercial, and mixed-use developments, further integrating NRIs into the country’s property ecosystem.
Tier-2 and Tier-3 Cities: New Opportunities
Beyond major metros, Budget 2026’s infrastructure and urban development focus is likely to drive real estate growth in Tier-2 and Tier-3 cities. Amit Chopra, President of NAR India, noted that measures such as asset monetization through REITs, continued infrastructure spending, and simplified property transactions will have broader impacts:
“The Union Budget 2026–27 introduces measures relevant to real estate, particularly across asset monetization, infrastructure spending, and transaction ease. The proposal to use REITs for monetizing Central Public Sector Enterprise assets is expected to unlock value from underutilized government land and attract institutional capital. Continued capital expenditure on infrastructure and urban connectivity may support demand in Tier-2 and Tier-3 markets. The removal of the TAN requirement for NRI property sales simplifies compliance, while tourism-focused initiatives could benefit hospitality-led real estate.”
Chopra also cautioned that some expectations, such as higher home loan interest deductions, a revised affordable housing definition, and formal industry status for real estate, remain unaddressed and could require further policy action.
Global Confidence and Premium Real Estate Demand
Analysts believe that the combined effect of simplified compliance, increased equity access, and strong infrastructure spending could drive premium housing demand across India. NRIs, with fewer administrative barriers, may increasingly participate in high-end residential and investment-grade properties.
Sathish CG emphasized, “The reforms mark a pivotal shift. This is poised to catalyze demand for premium and aspirational housing, reinforcing confidence in long-term market growth.” Meanwhile, Santosh noted that ease of overseas travel and spending flexibility further strengthens global investor sentiment, creating a pipeline of capital for Indian real estate projects.
Real Estate Market Outlook: Integration and Long-Term Growth
Experts agree that the PAN-based TDS mechanism, coupled with infrastructure investments and REIT facilitation, positions India to attract both domestic and overseas capital efficiently. The focus on Tier-2 and Tier-3 cities, alongside metro hubs, creates opportunities for geographically diversified investments, reducing market concentration risk.
Developers are likely to respond with transit-oriented projects, mixed-use developments, and luxury housing, leveraging the new compliance framework and increased liquidity from NRI investors. Institutional and retail investors can expect a more transparent, streamlined, and attractive real estate ecosystem.
Conclusion: NRIs at the Heart of India’s Growth Story
Union Budget 2026-27 signals a deliberate effort to integrate NRIs and overseas investors into India’s real estate and capital markets. By simplifying property compliance, widening equity investment avenues, and linking infrastructure spending to urban growth, the government is creating a robust investment environment.
For NRIs, this represents lower compliance burdens, faster property transactions, and greater confidence in long-term returns. For developers and investors, the reforms promise stronger liquidity, improved project completion rates, and expansion into emerging urban and Tier-2/Tier-3 markets.
As India continues its infrastructure-led growth trajectory, NRIs are set to play an increasingly central role in shaping residential, commercial, and mixed-use real estate markets, reinforcing the nation’s Viksit Bharat vision.
