Like every year, this year budget will also be presented on Feb 1 of the year, which is Feb 1, 2026 for current year budget. Budget will be presented by the Honourable Finance Minister Smt Nirmala Sitharaman presented India’s Annual Budget. In this budget, honourable FM will propose some new tax and other provisions. Hereunder, we have summarised some major proposals which would have impact on NRIs, OCIs, Expatriates, Seafarers and other Non-residents.
Tax Slabs, Tax Rates – Applicable for FY 2026-27 (i.e. For The Year Ending March 31, 2027), AY 2027-28
Changes In Old Regime: There is no change expected in tax slabs or tax rates under the old tax regime (i.e. regime where various deductions can be claimed however tax rates are otherwise more as compare to New Regime). Hence, the tax rates which are applicable for FY 2025-26 will be applicable for FY 2026-27. Here is a table for Tax Rates under Old Regime
Comparative Chart of Existing Vs Proposed Tax Rates under Old Regime
| Earlier Tax Slab & Rates (Applicable For FY 2025-26) | Budget 2026 Proposed Tax Slab & Rates (Applicable For FY 2026-27) | ||
| Tax Slabs | Tax Rates | Tax Slabs | Tax Rates |
| <= 2.50 Lakh | Nil | <= 2.50 Lakh | Nil |
| 2.50 Lakh to 5 Lakh | 5% | 2.50 Lakh to 5 Lakh | 5% |
| 5 Lakh to 10 Lakh | 20% | 5 Lakh to 10 Lakh | 20% |
| >10 Lakh | 30% | >10 Lakh | 30% |
Changes In New Regime: Since last many budgets, Govt is trying to shift taxpayer choice to New Tax Regime (i.e. regime where various deductions are not available however tax rates are lower as compared to old regime). Hence, significant changes (in terms of lowering tax liability under New Regime) have been made. In the present budget (i.e. Budget 2026), there is no change expected.
Hereunder, is a table depicting the tax slab & Rates for last two years and proposed rate for the Financial Year 2026-27 (i.e. AY 2027-28)
Comparative Chart – Earlier Year Tax Rates Vs Proposed Tax Rates Under New Regime
| New Tax Regime | |||||
| Tax Slabs & Rates (FY 2024-25) | Tax Slabs & Rates (FY 2025-26) | Budget 2026 Proposed Tax Slabs & Rates (FY 2026-27) | |||
| Tax Slabs | Tax Rate | Tax Slabs | Tax Rate | Tax Slabs | Tax Rate |
| <= 3 Lakh | Nil | <= 4 Lakh | Nil | <= 4 Lakh | Nil |
| 3 Lakh to 7 Lakh | 5% | 4 Lakh to 8 Lakh | 5% | 4 Lakh to 8 Lakh | 5% |
| 7 Lakh to 10 Lakh | 10% | 8 Lakh to 12 Lakh | 10% | 8 Lakh to 12 Lakh | 10% |
| 10 Lakh to 12 Lakh | 15% | 12 Lakh to 16 Lakh | 15% | 12 Lakh to 16 Lakh | 15% |
| 12 Lakh to 15 Lakh | 20% | 16 Lakh to 20 Lakh | 20% | 16 Lakh to 20 Lakh | 20% |
| >15 Lakh | 30% | 20 Lakh to 24 Lakh | 25% | 20 Lakh to 24 Lakh | 25% |
| >24 Lakh | 30% | >24 Lakh | 30% | ||
Analysis of Budget Proposals For Tax Rates Changes – For NRIs
- Since, Govt want to shift tax payers from Old Regime to New Tax Regime, hence, there is not change expected in the Budget 2026 under Old Regime.
- New Regime is a good option and beneficial for Non-residents as they do not claim deductions in their ITR.
- As per the proposed changes under New Tax Regime, Non Residents shall get advantage of tax saving.
New Tax Regime – Benefit Analysis of Budget 2026 Proposal – FY 2025-26 Vs 2026-27
| (A) | (B) | (C) | ||||||
| Income Rs | Tax (FY 2024-2025) | Tax (FY 2025-2026) | Tax (FY 2026-2027) | Tax Benefit FY 2026-27 Vs FY 2025-26 (A-B) | Tax Benefit FY 2026-27 Vs FY 2024-25 (A-C) | |||
| Tax @ Slab rate | Total Tax (incl SC & Cess) | Tax @ Slab rate | Total Tax (incl SC & Cess) | Total Tax (incl SC & Cess) | ||||
| 4 Lakhs | 5,000 | 5,200 | 0 | 0 | 5,200 | 0 | 5,200 | |
| 8 Lakhs | 30,000 | 31,200 | 20,000 | 20,800 | 10,400 | 20,800 | 10,400 | |
| 12 Lakhs | 80,000 | 83,200 | 60,000 | 62,400 | 20,800 | 62,400 | 20,800 | |
| 15 Lakhs | 1,40,000 | 1,45,600 | 1,05,000 | 1,09,200 | 36,400 | 1,09,200 | 36,400 | |
| 16 Lakhs | 1,70,000 | 1,76,800 | 1,20,000 | 1,24,800 | 52,000 | 1,24,800 | 52,000 | |
| 20 Lakhs | 2,90,000 | 3,01,600 | 2,00,000 | 2,08,000 | 93,600 | 2,08,000 | 93,600 | |
| 24 Lakhs | 4,10,000 | 4,26,400 | 3,00,000 | 3,12,000 | 1,14,400 | 3,12,000 | 1,14,400 | |
| 40 lakhs | 8,90,000 | 9,25,600 | 7,80,000 | 8,11,200 | 1,14,400 | 8,11,200 | 1,14,400 | |
| 50 Lakhs | 11,90,000 | 12,37,600 | 10,80,000 | 11,23,200 | 1,14,400 | 11,23,200 | 1,14,400 | |
| 60 Lakhs | 14,90,000 | 17,04,560 | 13,80,000 | 15,78,720 | 1,25,840 | 15,78,720 | 1,25,840 | |
| 120Lakhs | 32,90,000 | 39,34,840 | 31,80,000 | 38,03,280 | 1,31,560 | 38,03,280 | 1,31,560 | |
- Hence, from the above table it clearly seems that there is a significant amount of tax relief in proposed financial year (i.e. FY 2026-27) as compared to earlier years.
Budget 2026 Impact and Significance For NRIs, OCIs, Seafarers
Budget 2026 has brought many proposals which will be directly benefitting the Non Residents i.e. NRIs, OCIs, Seafarers, Other Non-Residents. This article prepared by S Lohia & Associates NRI Team will be helpful in clarifying their various questions as under:
- What are the budget proposals on tax rates for NRIs, OCIs for FY 2025-26? Is there any additional tax saving in terms of tax payable provided in Budget 2025 to Non Residents?
- Is there any extended time limit provided for NRIs in Budget 2025 for filing their ITR for previous years?
- What are the TCS relaxations for foreign going students and travellers in Budget 2025?
- Need a Tax Consultant for NRIs, Non Resident matters in Delhi, Mumbai, Bangalore, Chennai, Other parts of India who can advise in relation to Budget 2025 provisions?
NRI Tax, RBI Laws Services – Various Topics – By S Lohia NRI Matters Team
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