Trump’s administration plans to store 5 % tax on external remittings. In Big Priority Bill President Donald Trump, there is a proposal for a 5 % excise duty on remittance transfers that would cover millions of people, including those holding green cards and H1B visas.
Remitations are usually a transfer from a well -intended individual or family member to another individual or household. According to the World Bank, the movement of funds from the country of work back to the home country is known as remittance.
What is the new Trump Admn account about remittances?
A provision proposed as a bill called ”The one, the big, beautiful account“He states that:” This provision imposes five percentage consumer tax on remittance, for which the sender will be paid with respect to such transfers. “
Remitnce is used to any international transfer unless the transferor is a “verified US sender”.
“The provision requires the tax to be collected to the transfer providers and the remittance providers are responsible for taking such a tax quarterly to the Secretary of the Treasury,” he says.
Especially in the proposed bill, no minimum limit was set. This means that even small transactions will be taxed if the sender qualifies as a “verified American sender” defined as a citizen or a US citizen.
These taxes would be detained by the remittance provider at the moment of transfer, which would affect both traditional bank transfers and NRO/NRO account transactions.
“The provision also provides a refund for any excise duties that need to be paid by taxpayers with valid social security numbers. Finally, the provisions also have a rule against the conduct,” the proposed bill.
The proposed fee will not apply to US citizens. The bill says: “The provisions also create an exception for remittance transfers that are sent by verified US citizens or US nationals by qualified transfer providers.”
How does it affect Indians?
If the proposal is approved, the costs of Indians in the US will increase the money back home.
Remitations have long been a critical source of income for countries with low and medium incomes and continues to exceed the flows of direct investment of foreign investment (FDI) and ODA together.
Article published in Torch Bulletin Reserve Bank He said: “The US’s share in Indian total remitnesses remained the largest and in 2023-24 in 2020-21 increased to 27.7 percent out of 23.4 %.”
In the US there are nearly 54 lamps of overseas Indians, including about 33 laches of Indian origin (PIO), according to The Ministry of the External Affairs’ data.
Most of these individuals are in the US on temporary work visa, such as H-1B and L-1, or are green cards holders who have not yet received citizenship, FIRSTPOST said.
The The World Bank stated in December 2024 India has been the best recipient of remittance since 2008, with its share in world remitensions growing from approximately 11 percent in 2001 to approximately 14 percent in 2024.
“In 2024, India was the first five countries with an estimated influx of $ 129 billion in 2024, followed by Mexico ($ 68 billion), China ($ 48 billion), Philippines ($ 40 billion) and Pakistan ($ 33 billion).
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