NRI Tax Changes 2025-26: Budget 2025 for NRIs

These key figures apply to FY 2025-26 / AY 2026-27 unless an earlier effective date is stated. Section 87A is available only to resident individuals; NRIs are not eligible. Exact treaty rates and individual outcomes are confirmed for your facts.

Owner-verified figures; later-year rates, asset eligibility and applicable filing rules require separate confirmation. LRS is a resident-individual framework, not ordinary NRI NRO repatriation.

These verified bands apply to FY 2025-26, governed by the Income-tax Act, 1961. They are marginal rates, not a flat rate on all income. Section 87A is for resident individuals only in both regimes; NRIs receive no rebate. FY 2026-27 rates must be confirmed against the applicable Finance Act rather than assumed from this table.

Source: owner-verified FY 2025-26 / AY 2026-27 figures. Standard deduction is for eligible salary income, not rent or interest. Special-rate gains require a separate computation; the resident rebate headline is not a blanket exemption for them. NRIs are ineligible for either rebate.

Under the new regime, the verified Section 87A threshold is resident total income up to ₹12,00,000 with a rebate up to ₹60,000. The old-regime rebate threshold is ₹5,00,000 for residents only. NRIs are ineligible under both regimes, so do not apply the ₹12 lakh zero-tax headline to an NRI return. Special-rate gains need their own computation; non-residents cannot use unused basic exemption against Section 111A STCG or Section 112A LTCG in the usual resident way. Eligible salaried income has a ₹75,000 new-regime standard deduction or ₹50,000 old-regime deduction; these are not deductions against every income head. Compare your actual eligible deductions using NRI income tax in India and NRI tax slab 2025-26.

The Section 206C(1G) LRS/TCS threshold rose from ₹7 lakh to ₹10 lakh from 1 April 2025. The general rate is 20% on the amount above ₹10 lakh; specified education and medical purposes have concessional treatment whose eligibility and exact rate must be confirmed for your facts. LRS is a resident-individual remittance framework, not the ordinary route for an NRI to repatriate an NRO balance. TCS is a tax credit, not necessarily a permanent extra tax: reconcile it in the ITR and claim applicable credit or refund against the final liability.

The verified long-term capital-gains rate is 12.5% without indexation, with the listed-equity Section 112A exemption of ₹1.25 lakh, effective 23 July 2024. This is a continuing earlier change, not a new rate first introduced on 1 April 2025. Confirm that the asset, transfer date and relevant provision qualify rather than applying the headline indiscriminately to every investment. Section 111A short-term gains are a separate category; no additional unverified rate is supplied in this summary. See the NRI capital-gains and rates reference.

Finance Act 2025 extends the updated-return window to 48 months from the end of the assessment year, subject to statutory eligibility. ITR-U cannot decrease earlier tax liability, create a refund or increase a refund. The extension therefore does not turn an updated return into a method for recovering excess TDS. For an eligible domestic refund, use the applicable return or other legally available remedy after reviewing the year and facts. No additional-tax percentages are asserted here. Read Tax Residency Certificate (TRC), DTAA relief for NRIs and refunds.

FY 2025-26 / AY 2026-27 remains under the Income-tax Act, 1961. The Income-tax Act, 2025 replaces it with effect from 1 April 2026, for FY 2026-27 onward. The later Act’s commencement does not retrospectively shift FY 2025-26 into the new framework. Match your income period and return year to the correct law, forms and applicable Finance Act. This living summary verifies the supplied FY 2025-26 figures only; later-year rates require confirmation. For return planning read RNOR; for country context use the USA NRI tax corridor; for family-asset ownership read nominee vs legal heir in NRI estate planning. Use the NRI filing guide and the canonical tax calendar for the next steps.