US Plans 5% Remittance Tax: Indian Diaspora Faces $1.6 Billion Hit on Money Sent Home

A proposed US bill, “The One Big Beautiful Bill,” is set to impose a 5% tax on all outward remittances by non-citizens-including H-1B holders, green card holders, and other Indian residents-sending money to India. With no exemption for small transfers, every dollar sent home will be taxed at the point of transfer by banks or money services. The move could cost the Indian diaspora over $1.6 billion annually, given that Indians in the US remitted $32 billion to India in 2023-24. The bill is expected to pass the US House and may become law as early as July 2025, prompting financial advisors to warn of a sharp rise in remittance costs and urging Indians to remit larger amounts before the tax takes effect. Source: Times of India, Economic Times, Firstpost