President Donald Trump’s proposed “One Big Beautiful Bill Act” includes a 5% tax on international remittances sent by non-US citizens, which could significantly impact the Indian community in America. The bill, recently advanced by the US House Budget Committee, would withhold 5% of the remitted amount at the point of transfer, with no exemption threshold limit. If passed, the law could be a massive financial blow to nearly 45 lakh Indians living in the US, including nearly 32 lakh persons of Indian origin.
According to a remittance survey by the Reserve Bank of India, of the total $118.7 billion remitted in 2023-24, nearly 28%, or $32 billion, came from America. This means the Indian community may have to pay $1.6 billion as remittance tax if the law is enacted.
Remittance tax’s impact on Indians
The proposed tax would also affect transfers of investment income or proceeds from stock options, often used by non-resident Indians to support families back home or make investments in their home country. The legislation also provides funding for Trump’s border wall, deportation agenda, and changes to immigration policy, such as imposing a $1,000 fee on migrants seeking asylum. Critics argue that the remittance tax could disrupt the financial stability of families relying on these funds and strain diplomatic relations with key US allies.
Countries like El Salvador, Honduras, Guatemala, and Mexico, which rely heavily on remittances, could see a significant economic downturn if the bill is passed. As the debate around the “One Big Beautiful Bill Act” progresses, legal experts and human rights organizations are gearing up to challenge its provisions. The international community is closely watching, with many calling for comprehensive assessments of the bill’s potential consequences on economies, international relations, and the lives of countless individuals.