A new bill working its way through the U.S. Congress may significantly impact the finances of Non-Resident Indians (NRIs) and other immigrants. Officially titled “The One Big Beautiful Bill,” the proposed legislation contains a 5% remittance tax on money sent abroad by non-citizens—including H-1B visa holders, green card holders, and other non-immigrant visa categories.
🔹 What Does the Bill Propose?
The bill stipulates that anyone who is not a U.S. citizen and who transfers money out of the United States will be required to pay a 5% remittance tax.
For example:
If you send ₹1,00,000 (roughly $1,200) to your family in India, ₹5,000 (5%) would be withheld by the IRS as tax.
U.S. citizens will not be subject to this tax, making it a targeted levy on the immigrant community.
🔹 What’s in the Rest of the Bill?
While the remittance tax is just one part, the broader bill includes several major tax policy proposals:
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Making the 2017 Tax Cuts and Jobs Act permanent
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Increasing the standard deduction
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Extending the child tax credit to $2,500 through 2028
These changes reflect a mix of tax relief for citizens and revenue-raising provisions targeted at non-citizens.
🔹 What’s the Timeline?
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The House of Representatives aims to pass the bill by Memorial Day (May 26, 2025).
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If successful, the bill will move to the Senate, with the goal of reaching President Trump’s desk by July 4, 2025.
This accelerated legislative timeline means that any major remittance decisions should ideally be made before July, in case the tax becomes law.
🔹 What Does It Mean for NRIs?
If enacted, this 5% remittance tax could significantly impact personal finances for many Indians living and working in the U.S. It would add a new layer of cost to supporting families back home or investing in India.
NRIs and other immigrants will need to update their financial planning, consider the timing of transfers, and perhaps even rethink their longer-term strategies regarding residency or remittances.
🔹 Bottom Line
This bill, while framed as a broad tax package, marks a clear shift in how the U.S. treats financial transactions by immigrants. With a July 2025 decision looming, NRIs should stay informed and prepare early for a potentially more expensive remittance landscape.
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