“One Big Beautiful Bill”: Foreign remittance tax for Indians in U.S.

The U.S. Congress passes Donald Trump’s “One Big Beautiful Bill” connected Thursday (July 03, 2025). The legislation, which takes effect connected July 4, 2025, introduces a 1% levy connected remittances made done cash, wealth orders, oregon cashier’s cheques.

It targets planetary wealth transfers made by non-U.S. citizens, including greenish paper holders and impermanent visa workers similar those connected H-1B oregon H-2A visas. The projected levy volition not beryllium applicable to U.S. citizens.

India stands arsenic the world’s apical remittance recipient. Other large recipients see Mexico, China, the Philippines, France, Pakistan and Bangladesh.

“The projected U.S. taxation connected remittances sent overseas by non-citizens is raising alarm successful India, which stands to suffer billions successful yearly overseas currency inflows if the program becomes law,” the Global Trade Research Initiative (GTRI) said.

GTRI said that the nonaccomplishment would tighten the proviso of U.S. dollars successful India’s overseas speech market, putting humble depreciation unit connected the rupee.

In a alleviation to Non-Resident Indians (NRI), the taxation complaint was primitively acceptable astatine 5%, but was reduced to 1% successful the last mentation of the Bill.

The Bill besides exempts remittances made from “an relationship held successful oregon by a fiscal institution” and those “funded with a debit paper oregon a recognition paper issued successful the United States”.

How does it interaction India?

Reserve Bank of India information shows the U.S. is the largest root of remittances to India, accounting for 27.7% or $32.9 cardinal of the remittances that flowed into the state successful 2023-24.

In States similar Kerala, Uttar Pradesh, and Bihar, millions of families trust connected remittances to screen indispensable expenses similar education, healthcare, and housing.

“A taxation connected remittances would surely dent the remittances coming into India,” a authorities authoritative told The Hindu. “But the authorities has not yet made an appraisal of what that dent volition be.”

The authoritative besides added that India has besides not yet taken a telephone connected whether to attack the U.S. for immoderate alleviation successful the substance oregon not.