An Indian working and living in USA will have to pay 5% tax on the money sent to his family in India.
Washington: US President Donald Trump has proposed a new law called 'One Big Beautiful Bill'. And the foreheads of the Indian diaspora in USA are frowned upon. The new bill has plans to reduce taxes, reduce government spending and improve border security. However, a part of this bill proposes that a 5% tax will be imposed on money transfers (remittances) from USA to other countries. That is, an Indian working and living in USA will have to pay 5% tax on the money sent to his family in India.
The bill states that this 5% tax will be collected by US banks or service providers. They will deposit this tax in the government treasury. If someone does not collect the tax at the time of money transfer, the banks and service providers will be responsible for it. However, US citizens or those born in USA will not be subject to this tax. They will have to sign an agreement with the US Treasury by showing proof of US citizenship. The bill does not propose any tax exemption based on the money transferred.
The Trump administration's initiative will have the biggest impact on the Indian diaspora. India receives the highest remittances from the US. In 2023-24, India received $118.7 billion. Of that, 27.7% came from the US. Most of those remittances come from Indians living in the US on H-1B and L-1 visas. Indians received 70% of the H-1B visas issued last year. As a result, if the bill becomes law, Indian diaspora will have to pay additional taxes to send money to their families in the country. As a result, the number of remittances may decrease.
Washington: US President Donald Trump has proposed a new law called 'One Big Beautiful Bill'. And the foreheads of the Indian diaspora in USA are frowned upon. The new bill has plans to reduce taxes, reduce government spending and improve border security. However, a part of this bill proposes that a 5% tax will be imposed on money transfers (remittances) from USA to other countries. That is, an Indian working and living in USA will have to pay 5% tax on the money sent to his family in India.
The bill states that this 5% tax will be collected by US banks or service providers. They will deposit this tax in the government treasury. If someone does not collect the tax at the time of money transfer, the banks and service providers will be responsible for it. However, US citizens or those born in USA will not be subject to this tax. They will have to sign an agreement with the US Treasury by showing proof of US citizenship. The bill does not propose any tax exemption based on the money transferred.
The Trump administration's initiative will have the biggest impact on the Indian diaspora. India receives the highest remittances from the US. In 2023-24, India received $118.7 billion. Of that, 27.7% came from the US. Most of those remittances come from Indians living in the US on H-1B and L-1 visas. Indians received 70% of the H-1B visas issued last year. As a result, if the bill becomes law, Indian diaspora will have to pay additional taxes to send money to their families in the country. As a result, the number of remittances may decrease.
Post a Comment