The US House of Representatives is understood to have passed the ‘One Big, Beautiful Bill Act’ — a sprawling tax and spending package that reflects President Donald Trump’s economic vision.
The fine print of the bill, released overnight, proposes a 3.5% tax on remittances — down from the earlier 5%.
On May 13, 2025, the House Ways and Means Committee began deliberating on the bill. It aims to overhaul outdated tax policies and build on the 2017 tax cuts.
The goal: support working families and prioritise US economic interests.
If enacted, the 3.5% excise tax on remittances could significantly impact India. The country receives around $25 billion in remittances from the US every year.
Who could be affected?
If the proposal becomes law, it may hit several groups:
- Visa holders (H-1B, F-1)
- Green card holders
- Non-residents with US income or assets
- Foreign nationals receiving restricted stock units (RSUs) or other US-sourced income who send money abroad
Tax experts in India warn of potential consequences.
Families could see a sudden drop in remittance value. The proposal may also discourage foreign workers from maintaining assets or employment in the US
Those working in the US may face higher compliance burdens.
Financial institutions and money transfer services could see increased enforcement pressure.
Lloyd Pinto, Partner, US Tax at Grant Thornton Bharat, called it a significant development buried in the bill. “The amended version reduced the proposed excise tax on outward remittances from 5% to 3.5%,” he said.
“No other changes have been made to this section. The new tax, if enacted, will apply to remittances from January 1, 2026, onwards — just at a lower rate.”
He added: “For Indians in the US — green card holders or those on H-1B or other visas — the tax will apply in addition to any income taxes already paid. In the short term, we expect a spike in remittances to India before January 1, 2026. We may also see some shift from formal to informal channels.”
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(Edited by : Anshul)
First Published: May 23, 2025 12:57 PM IST
