Several provisions in the “one big, beautiful act” of Donald Trump increases tax immigrants. This includes a new 1 % of money transfer tax to foreign countries, such as India, known as remittance. Many immigrants in the US send money to relatives in their countries of origin.
According to “One big, beautiful act‘signed by Trump on Friday 4 July Picnice White House, migrants and others who send money abroad would be taxed to 1 percent of the transfer.
What is the new rule of remittance in us?
The law states: “This is imposed on any transfer of transfer tax equal to 1 % of the amount of such a transfer… Tax imposed by this section… will be paid by the sender.”
According to the rule, the tax will apply to transfers made through cash, cash orders or cash checks. However, transfers made from financial institutions or funded by debit/credit cards issued in the US will be exempt.
Also, those who use the “qualified transfer service” will also be exempt.
The Remitimate Tax rate was originally set at 5%, but in the final version of the law it was reduced to 1%-it has been concerned about millions of non-resident Indians.
The rule applies to US residents who are not citizens, including green card holders, H-1B and H-2A visas holders and foreign students.
How does it affect Indians?
This provision in “one big, beautiful act” increases the cost of Indians in the US to send 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.
According to India in March, India “The US’s share in India, India, remained the largest and increased to 27.7 percent in 2020-21 in 2023-24.”
Meanwhile, the World Bank said in December 2024 that India had received a record $ 129 billion for remittance, the highest in the world, with 28 percent of which comes from the US.
According to the Ministry of the Ministry for External Affairs, there are almost 54 lacquers in the US, including about 33 lakh people of Indian origin (PIO).
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