Bad news for India as Donald Trump proposes 5 percent remittance tax, will affect Indians due to..., India may face loss of...
New Delhi: The tariff hunger of American President Donald Trump is still not satisfied. Now, the Trump administration has proposed a heavy tax on the amounts sent by foreigners working in the U.S. to their relatives, family members, or back to their home countries. This means there is a proposal to impose a tax (remittance tax) on the money sent abroad from the U.S. This proposal has raised concerns among millions of foreigners working there. If this proposal is passed, it could result in India losing billions of rupees annually.
A 389-page bill titled 'The One Big Beautiful Bill' has been introduced in the U.S. Congress. This bill officially proposes that individuals who are not American citizens and are sending money outside the U.S. will be subjected to a 5% tax on all of their remittances. This bill could be a significant blow to many foreigners, including expatriate Indians, who regularly send money to their families in India or make regular investments in their home countries.
The bill is a fiscal package aimed at continuing the tax cuts from the Trump era and reducing federal spending. But this bill mentions a 5 percent tax on remittances on page 327, which directly targets non-American citizens. It is worth noting that the United States is not only the largest center of Indian migrants in the world but also the largest source country for remittances to India.
According to the Indian Ministry of External Affairs, there are approximately 4.5 million Indian migrants in the USA. Most of these individuals are either in the US on H-1B visas or temporary work visas like L-1, or they are green card holders who have not yet obtained American citizenship. If the USA imposes the proposed remittance tax, it could have a significant impact on India.
According to the Reserve Bank of India (RBI), in the financial year 2023-24, India received 118.7 billion dollars in remittances globally, of which approximately 28 percent, or 32 billion dollars, came solely from the United States. If the U.S. implements the proposed remittance tax without any exemptions or deductions at a flat rate of five percent, it will result in an additional annual tax of 1.6 billion dollars on Indian migrants living in the U.S.
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