Sending Money Home Gets Costlier: US Plans 5% Remittance Tax for Indian Expats in 2026

Indian expats in the US could soon suffer a major blow to remit money to their families back home, as a proposed new tax recommends charging 5% on every dollar sent overseas by non-citizens from January 1, 2026. The tax, as part of former President Trump's "One Big Beautiful Bill," has cleared a major hurdle in Congress and could pass the law by July.

 

This move directly impacts nearly 4.5 million Indians in America, comprising H-1B and L-1 visa holders, Green Card holders, and students—nobody is exempted. Even minor remittances of $100 will be taxed, with the fee collected at the point of transfer. For Indian families, this could mean an extra $1.6 billion in taxes annually, meaning there would be less money left to spend on education, healthcare, and savings.

 

Experts have cautioned that the tax will push some to off-the-books transfer routes, increasing security and transparency risks, and may severely affect India's rural economy and realty market. 

 

Source: Gulf News, Business Standard, YouTube