Trump’s tax: Indians remitting from the US may lose over $1.5 bn annually
Virendra Pandit
New Delhi: In 2023-24, Indians living in the US remitted USD 32 billion to their families back home and the motherland. From this year, however, if the US Congress passes a new law, the non-US citizens among them may have to pay a five percent remittance tax on this amount, or USD 1.5 billion.
The US House Budget Committee voted 17-16 late on Sunday night to advance President Donald Trump’s “One Big Beautiful Bill Act,” which would make sending money back home more expensive for thousands of Indian residents and Non-Resident Indians (NRIs) living in America, the media reported on Monday.
The bill proposes a 5 percent remittance tax on all international money transfers made by non-US citizens, including non-immigrant visa holders (like H-1B) and Green Card holders. If passed, the law would withhold 5 percent of the remitted amount at the point of transfer itself. No exemption threshold limit has been set, meaning it would even apply to transfers of small denominations, the reports said.
The section on remittances in the 1,116-page-long legislation, however, specified that the 5 percent clause will not apply to any remittance transfer by a ‘verified US sender’, that is if the sender is a US citizen or national of the United States.
The law could come as a financial blow to nearly 45 lakh Indians living in the US, including 32 lakh persons of Indian Origin.
According to a remittance survey published by the Reserve Bank of India (RBI) in March 2025, of the total USD 118.7 billion the Indians remitted in 2023-24, nearly 28 percent or USD 32 billion came from the USA. On this amount, if the new law is enacted, the Indian community may have to pay USD 1.6 billion (5 percent of USD 32 billion) as remittance tax.
The proposed tax is not limited to monetary remittances and would also affect transfers of investment income or proceeds from stock options, that is often used by the NRIs to support their families back home or make investments in their home country.
The fresh legislation will hit immigrants in more ways than one. It would provide USD 46.5 billion to revive construction of President Trump’s wall along the US-Mexico border, and more money for the deportation agenda. It includes USD 4 billion to hire an additional 3,000 new Border Patrol agents, 5,000 new customs officers, and USD 2.1 billion for signing and retention bonuses. There’s also funding for 10,000 more Immigration and Customs Enforcement (ICE) officers and investigators.
Besides, it also includes major changes to immigration policy, imposing a USD 1,000 fee on migrants seeking asylum—something the US has never done—putting it at par with Australia, Iran, and some others.
Overall, the Trump plan is to remove 1 million immigrants annually and house 100,000 people in detention centres.
On Friday, a group of Budget Committee hard-liners voted to block the new litigation from moving forward, defying Trump and Republican leaders. However, in Sunday’s vote, the bill was passed by a 17-16 vote and moved one step closer to a floor vote.
