‘One Big Beautiful Bill’ could cost Indian Americans billions in remittance tax

A newly proposed bill in the United States, officially titled The One Big Beautiful Bill, seeks to impose a 5% tax on all foreign remittances sent by non-US citizens, including H-1B visa holders, L-1 workers, and even green card holders.

This move could directly impact lakhs of Indian immigrants living in the US, who collectively remitted an estimated $32 billion to India in 2023-24.

The bill, released by the US House Ways and Means Committee, outlines on page 327 of its 389-page text that any international money transfer made by a "non-verified US sender" — meaning a non-citizen — will be subject to a 5% tax withheld at the point of transfer. There is no exemption for small transactions, making even minor personal remittances liable under the proposed rule.

India remains the largest recipient of remittances globally, with the US being the top source, driven by a sizeable and high-earning Indian diaspora. According to India’s foreign ministry, there are over 4.5 million persons of Indian origin (PIOs) and NRIs in the US, with over 3.2 million being PIOs. An RBI survey revealed that 28% of India’s total remittances in 2023-24 came from the US, amounting to $32 billion.

If the bill is passed and the remittance level remains the same, Indian-origin residents in the US would collectively bear an estimated $1.6 billion in taxes annually. The bill is expected to move swiftly through the House of Representatives and could become law by June or July 2025. Experts are already advising Indian residents in the US to consider sending larger remittances in the short term before the law takes effect.

The bill has raised concerns within immigrant communities, especially among those who regularly support family members back home or make cross-border investments in property and securities.