President Donald Trump’s One Big Beautiful Bill Act has advanced in the Senate, featuring a reduced 1% tax on remittances, offering relief to Indian professionals and non-resident Indians (NRIs) in the U.S.
In a significant development for Indian professionals and non-resident Indians (NRIs) in the United States, President Donald Trump’s One Big Beautiful Bill Act has managed to surmount a major hurdle in the Senate, now offering a considerably lowered remittance tax of 1%. This development is seen as a substantial relief from the originally proposed 5% tax rate, which had initially drawn widespread concern.
The updated draft of the bill now implements a mere 1% tax on remittances sent via cash, money orders, or cashier’s checks. This marks a substantial reduction from the 5% rate proposed in May, which was later downscaled to 3.5% in the House version of the bill. The reduced tax rate applies to remittance transfers not made through financial institutions or using a debit or credit card issued in the United States.
The initial draft of the bill passed by the House of Representatives in May caused alarm among many Indian professionals due to its high proposed tax, affecting non-U.S. citizens, including those on Green Cards and temporary visas like H-1B and H-2A. Remittances comprise a significant component of India’s foreign income, making the tax rate particularly relevant for Indian nationals residing abroad.
Data from the Migration Policy Institute, as cited by The Times of India, indicated that approximately 2.9 million Indians were living in the U.S. as of 2023, making them the second-largest foreign-born demographic in the country. Additionally, the World Bank reported in 2024 that India was the largest recipient of international remittances, accumulating $129 billion, with 28% of these remittances originating from the U.S.
In light of these statistics, the remittance policy is pivotal for states like Kerala, Uttar Pradesh, and Bihar, where remittances are a crucial financial lifeline for millions of households.
Despite the remittance tax relief, the One Big Beautiful Bill Act includes contentious elements such as a $150 billion increase in military spending, mass deportation measures, and funding for a border wall. To offset these expenses, the bill proposes substantial cuts to federal programs, including Medicaid and incentives for clean energy, inciting opposition from various political factions, including divisions within the Republican Party itself.
This policy proposal has led to public disagreements, notably between President Trump and Tesla CEO Elon Musk, who lashed out at the bill as “utterly insane,” cautioning that it would jeopardize millions of American jobs.
The flag-bearing piece of legislation narrowly passed a Senate vote by 51-49, pushing it forward for further Senate discussions. According to Al Jazeera, President Trump aims to see the bill enacted by Congress before the Fourth of July.
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