Donald Trump, U.S. President, introduced the “One Big Beautiful Bill Act,” which includes extensive changes in taxes, government spending, and how immigration is enforced. One of the main points in the bill that has sparked much debate is the idea to charge 5% on every remittance transfer. By enforcing this measure, the United States could be facing major consequences for the large group of Indian workers who live there.
This tax would be charged by banks and other financial institutions that help with sending money to different countries. They would have to submit the taxes received to the U.S. Treasury every three months. What’s more, if taxes aren’t properly paid at the time someone is transferred, these providers are also considered liable under the law.
The bill allows U.S. citizens and nationals to claim an exemption from the 5% tax. In order to be recognized as a qualified remittance transfer provider, individuals under this category would need to sign a written agreement with the Secretary of the Treasury, along with the service provider. Many Indian professionals and workers in the U.S. are very likely to pay the tax unless they are exempt.
This idea arrives when remittances from the United States to India are breaking new records. In the latest global survey from the Reserve Bank of India, the U.S. topped the list, accounting for 27.7% of all money sent to India in 2023-24. Over $118 billion in remittances came into India during the period, keeping the country’s precious reserves from falling.
If accepted, the new law may have a strong impact on Indian diaspora families and the ways they handle their financial matters.
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