India’s ₹20 lakh Tax Reset Changes the NRI Playbook

India’s Income Tax Act, 2025 is now the rulebook. It took effect on April 1, 2026 and it replaces the 1961 Act with simpler forms, cleaner residency tests and lower-friction compliance for non-residents, which, surprisingly, is the part that matters most if you work remotely or move around a lot.

The big win is for foreign workers and tech firms. Data center and cloud operators linked to India get a tax holiday through March 31, 2047 and notified non-resident experts can get a 5-year exemption on non-India-sourced income under approved schemes, so India is clearly trying to pull in capital and talent, not just collect tax.

This affects expats, digital nomads and NRIs in different ways. Non-residents are taxed only on India-sourced income, TDS rules are lighter in a few places and some filings are more automated, but high-income Indian citizens and PIOs face tighter residency tests, including the 120-day rule and deemed residency in some cases, honestly a much sharper net than before.

A few practical moves matter now. File the right return, usually ITR-2 or ITR-3, check whether your foreign assets fit the FAST-DS 2026 disclosure window and watch the new TDS and GST triggers if you sell services to Indian users, because that part can bite fast, weirdly fast.

What to do now

• Confirm your residency status for Assessment Year 2027-28.
• Review India-sourced income only.
• Check foreign asset disclosure exposure.
• See if your income qualifies for any exemption scheme.

For the full breakdown, read our India guide and keep an eye on visa updates as the rules settle in.