New draft of U.S. law cuts remittance tax to 1%, exempts bank and card transfers
The Hindu ^ | June 28, 2025 | T.C.A. Sharad Raghavan
Posted on 06/30/2025 7:28:39 AM PDT by fluorescence
U.S. legislators have significantly diluted the provision in the proposed legislation to tax remittances to other countries, including to India. The latest version of the Bill, released on Friday (June 27, 2025), reduces the tax on remittances to 1% from the earlier proposal of 3.5%, and excludes remittances made from bank accounts and other financial institutions and those made via debit or credit cards from the tax.
The 1% tax will now apply only on remittances made in cash, a money order, or a cashier’s check. According to international tax experts, this will come as a significant relief to the non-resident Indian (NRI) community in the U.S.
The ‘One Big Beautiful Bill Act’ was passed by the U.S. House of Representatives in May 2025. It is now up for debate in the U.S. Senate, following which it will be voted upon.
“There is hereby imposed on any remittance transfer a tax equal to 1 percent of the amount of such transfer,” the latest version of the Act says. “The tax imposed by this section with respect to any remittance transfer shall be paid by the sender with respect to such transfer.”
However, the latest draft also inserts additional paragraphs to the section on the tax on remittances.
“The tax imposed under subsection (a) shall apply only to any remittance transfer for which the sender provides cash, a money order, a cashier’s check, or any other similar physical instrument (as determined by the Secretary) to the remittance transfer provider,” the draft Bill said.
In addition, the Bill now says that remittances made from “an account held in or by a financial institution” and “funded with a debit card or a credit card which is issued in the United States” are exempt from the tax.
“Senate Republicans released their updated draft of the proposed One Big Beautiful Bill Act on June 27 and have a self imposed deadline of July 4 to try to pass this bill,” Lloyd Pinto, Partner - U.S. Tax at Grant Thornton Bharat said. “The updated Senate version significantly changes the remittance transfer provisions that were passed by the House Republicans. In the latest Senate draft, the remittance transfer tax has been reduced to 1% from the erstwhile proposal of 3.5%.”
The 3.5% tax proposal itself was a reduction brought into the Act in May from the original proposal of 5%.
“This (the latest relaxations) should come as a huge relief to the NRI community in the US as they will not be subject to this remittance tax if the remittances are made through accounts held with designated US banks and financial institutions or funded via debit or credit cards issued in the U.S.”
TOPICS: Business/Economy; Government
KEYWORDS: h1b; remittances; remittancetax
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1 posted on 06/30/2025 7:28:39 AM PDT by fluorescence
To: fluorescence
Last I heard it was being raised to 35 percent.
2 posted on 06/30/2025 7:30:22 AM PDT by OKSooner (Always carry. Even if all you can handle is a .22, carry it. You might be surprised.)
To: fluorescence
Just wait until we have to give them 50% more for the privilege of sending our money out of the country. Perks for illegals!
3 posted on 06/30/2025 7:31:27 AM PDT by bgill
To: fluorescence
4 posted on 06/30/2025 7:32:51 AM PDT by ridesthemiles (not giving up on TRUMP---EVER)
To: fluorescence
No matter how small, this will enable flagging transfers to cartel outfits. Who sent the money and who got it.
And, no, I do not believe the liberal tag that this is just $$ being sent back to needy family members. No, it is payoff to cartel coyotes. If you hire an illegal you are hiring someone enslaved to the cartel.
5 posted on 06/30/2025 7:34:09 AM PDT by bobbo666
To: All
Remittance should be 200% for india and then maybe they would stop coming here
6 posted on 06/30/2025 7:34:32 AM PDT by escapefromboston (Peace, commerce and honest friendship with all nations, entangling alliances with none.)
To: OKSooner
Once a new tax is implemented, it hard to get rid of but easy to increase.
7 posted on 06/30/2025 7:35:05 AM PDT by armourenthusiast (I capitalize everything related to the South)
To: fluorescence
House Republicans -— “Here’s the Bill; it’s not perfect, but it’s a good step in the right direction.”
Senate Republicans -— “Let’s see what we can do to turn it into a worthless piece of trash that only democrats will love.”
8 posted on 06/30/2025 7:36:22 AM PDT by Flaming Conservative ((Pray without ceasing))
To: fluorescence
If it is right to tax those remittances then there is nothing “right” about excluding remittances that go through the regular banking channels. That carve out is a sop to the big banks because they would have to impose the remittance tax in the remittances that pass through their institutions. The carve out is a gift to the big banks. that’s all.
9 posted on 06/30/2025 7:37:13 AM PDT by Wuli (uire)
To: fluorescence
Meanwhile, US citizens are taxed at 25% or so.
10 posted on 06/30/2025 7:37:15 AM PDT by coloradan (They're not the mainstream media, they're the gaslight media. It's what they do. )
To: OKSooner
It should be raised to match the highest income tax bracket.
None of them pay income tax and all of them suck off social services, Medicaid, SNAP, whatever.
11 posted on 06/30/2025 7:38:06 AM PDT by MeanWestTexan (Sometimes There Is No Lesser Of Two Evils)
To: fluorescence
Crazy to incentivize illegal immigration. Crazy.
12 posted on 06/30/2025 7:43:44 AM PDT by NonValueAdded (First, I was a clinger, then deplorable, now I'm garbage. Feel the love? )
To: Flaming Conservative
Exactly. The stupidity of Senate Republicans knows no bounds.
13 posted on 06/30/2025 7:49:28 AM PDT by falcon99 ( )
To: bgill
Perks for illegals!
Perks for the Fed, printing money that doesn't inflate domestic currency. Apparently competition from BRICS doesn't bother them.
14 posted on 06/30/2025 7:49:56 AM PDT by Carry_Okie (The tree of liberty needs a rope.)
To: fluorescence
A tax on remittances should be Trump’s #1 weapon against Mexico
15 posted on 06/30/2025 7:51:22 AM PDT by bigbob (Yes. We ARE going back)
To: fluorescence
So NO tax if done through a bank.
16 posted on 06/30/2025 7:51:44 AM PDT by Pikachu_Dad
To: fluorescence
Senate GOP bows to Indian H1-B lobbyists. Disgusting traitors. Tax as passed by House would have raised $5+ billion per year, now at 1% and with exemptions, will raise $0.00.
17 posted on 06/30/2025 7:52:39 AM PDT by montag813
To: Flaming Conservative
It almost kinda causes one to ax how many Republican senators are carteled up.
18 posted on 06/30/2025 7:52:39 AM PDT by OKSooner (Always carry. Even if all you can handle is a .22, carry it. You might be surprised.)
To: fluorescence
I imagine you will see the remittance business dwindle as it moves to crypto. It’s faster, more secure, and cheaper.
The government missed the boat on this ages ago.
19 posted on 06/30/2025 7:54:06 AM PDT by Vermont Lt
To: Wuli
Yup. One of the primary rules of DC politics is, "Thou shalt not touch the banksters."
TR got fired up in his run for President when he asked a railroad baron for financial help with his campaign and the baron asked why he should help TR when he could just bribe a Senator to get what he wanted.
Looks like we have the same problem.
20 posted on 06/30/2025 8:14:09 AM PDT by pierrem15 ("Massacrez-les, car le seigneur connait les siens" )
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