The Finance Minister has announced a major tax policy revision in Union Budget 2026, introducing an exemption that will benefit foreign nationals residing in India. Under the new provision, foreigners who have been living in India for a period of 5 years will not be required to pay taxes on income they earn outside the country.

Key Policy Details

The announcement represents a significant change in India's tax framework for foreign residents. The policy specifically targets individuals who have established long-term residence in India, setting the threshold at 5 years of continuous stay.

Implications for Foreign Residents

This tax exemption could potentially make India a more attractive destination for international professionals, investors, and other foreign nationals considering long-term residence. The policy addresses concerns about double taxation and the complexity of managing tax obligations across multiple jurisdictions.

The 5-year residency requirement establishes a clear timeline for eligibility, providing certainty for foreign nationals planning their stay in India. This threshold suggests the government's intent to reward long-term commitment to residing in the country while maintaining tax revenue from shorter-term residents.

Budget 2026 Context

The announcement forms part of Union Budget 2026, indicating the government's broader approach to tax policy and its efforts to create a more favorable environment for foreign residents. This measure could be part of larger initiatives aimed at attracting and retaining international talent and investment in India.

The Finance Minister has unveiled a key policy proposal in Union Budget 2026, announcing tax exemptions for toll manufacturers engaged in supplying capital goods. This fiscal measure represents a targeted approach to support the manufacturing ecosystem in India.

Budget Proposal Details

The proposed tax exemption specifically targets toll manufacturers who are involved in the supply of capital goods. This initiative forms part of the broader budgetary framework aimed at strengthening the manufacturing sector's contribution to the economy.

Manufacturing Sector Impact

The announcement is expected to provide fiscal relief to companies operating in the toll manufacturing space, particularly those contributing to capital goods production and supply chains. This policy measure aligns with efforts to enhance the competitiveness of domestic manufacturing operations.

Policy Framework

The tax exemption proposal represents a focused intervention in the Union Budget 2026, demonstrating the government's commitment to supporting specific segments of the manufacturing industry through targeted fiscal incentives.