Indian expats in the US could be hit hard by a new bill that proposes a 5% tax on remittances sent outside the country by non-US citizens.
The US House of Representatives has introduced a new legislative proposal titled “The One Big Beautiful Bill,” which includes a provision to impose a 5% tax on remittances sent abroad by non-US citizens.
This measure is poised to significantly impact the Indian diaspora, particularly those on H-1B visas and green card holders, who collectively remit approximately $32 billion annually to India. If enacted, the Indian community in the US could face an additional financial burden of around $1.6 billion each year.
Scope of the proposed tax
The remittance tax would apply to all non-citizens, including individuals on H-1B and L-1 visas, as well as green card holders. The bill specifies that a 5% tax will be levied on any money transferred out of the US by non-citizens, with no exemption threshold, meaning even small transfers would be subject to the tax. The tax would be withheld by the remittance transfer provider at the time of the transaction .
