Indians, who number over 2.9 million in the US and account for nearly $32 billion (27.7 per cent) of India’s inward remittances in FY 2024, were among the most vocal in raising concerns about the original higher rates
Washington: The US Senate’s revised draft of the “One Big Beautiful Bill Act” cuts the proposed remittance tax from 3.5 per cent to just 1 per cent, offering big relief for non-citizens sending money home.
Under the Senate version, transfers from US bank accounts and via debit or credit cards issued in the United States are exempted, meaning most everyday remittances will fall outside the tax’s scope.
The tax applies only to transfers made after December 31, 2025, and affects only non-citizens, such as H-1B visa holders, green card holders, and international students, potentially covering student income sent home after graduation
Indians, who number over 2.9 million in the US and account for nearly $32 billion (27.7 per cent) of India’s inward remittances in FY 2024, were among the most vocal in raising concerns about the original higher rates.
Originally, the Bill proposed a 5 per cent remittance tax; the House first lowered it to 3.5 per cent, triggering widespread concerns among the Indian diaspora, who in FY 2024 accounted for 27.7 per cent (nearly $32 billion) of India’s inward remittances. Indians are the second-largest foreign-born group in the US, numbering over 2.9 million as of 2023
Under the Senate version, only non-citizens would be subject to the excise tax. Even part-time student earnings or internship income sent home after graduation could be taxed. The levy may also impact NRE account deposits, real-estate purchases, and corporate mobility programmes for employees receiving U.S.-based compensation or stock options
