Quick Summary
In a major relief for Indian professionals working in the United States and Non-Resident Indians (NRIs) sending money back home, the revised draft of the One Big Beautiful Bill Act (OBBBA) has slashed the proposed tax rate on remittances to 1%, down significantly from the earlier 5% rate that had triggered widespread concern in diaspora communities. The updated provision in the bill now states: "There is hereby imposed on any remittance transfer a tax equal to 1% of the amount of such transfer,
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FAQ :
The new tax rate on remittances to India from the US has been lowered to 1% in the revised draft of the 'One Big Beautiful Bill Act'.
The initial proposal for the tax rate was 5%, which was later reduced to 3.5% in the House version before being lowered to 1% in the Senate draft.
No, the tax only applies to remittances made via cash, money orders, or cashier's checks. Transfers made through bank account transfers or those funded via debit or credit cards issued in the US are exempt.
The sender of the remittance is responsible for paying the tax.
Remittances are a vital financial support for many Indian families, and the US is a major source of these funds. The lower tax rate reduces the financial burden on Indian-origin workers and Green Card holders sending money home.
The 'One Big Beautiful Bill Act' (OBBBA) is a flagship legislation backed by former President Donald Trump, covering various provisions including military spending, deportations, border funding, and social welfare cuts.
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