Washington D.C., May 19: Donald Trump’s much-discussed proposal, the ‘One Big Beautiful Bill’, is one step closer to becoming law. The U.S. House Budget Committee voted in favor of the 1,116-page bill on Sunday night, paving the way for major financial changes—especially for non-citizen residents including millions of Indian immigrants and NRIs (Non-Resident Indians) living in the United States.
If enacted, the bill will introduce a 5% tax on all outward remittances made by individuals who are not U.S. citizens, regardless of the amount transferred. This means even small remittances to families back home in India will be taxed, without any exemption threshold.
Trump’s ‘One Big Beautiful Bill’ Threatens Remittances: Millions of Indians in the US May Face Higher Tax Burden
Who Will Be Affected Most?
The brunt of this legislation will likely be felt by those on H-1B visas, Green Card holders, and other non-citizen residents working or doing business in the U.S. American citizens, however, will be exempt from this proposed tax.
The bill’s provisions also extend beyond remittances. Income from investments, including stock market gains, if transferred outside the U.S., would fall under this new taxation model as well.
According to estimates, around 4.5 million Indians currently live in the U.S., including 3.2 million Indian-origin individuals. If the bill becomes law, a large number of these residents could face significant financial strain.
India’s Remittance Inflow at Risk
Data from the Reserve Bank of India (RBI) shows that in FY 2023–24, India received $11,870 crore USD in foreign remittances, with 28% (around $3,200 crore USD) coming from the United States alone. If the bill becomes law, this number could drop sharply, affecting India’s foreign exchange reserves and the families of NRIs.
Political Tension Around the Bill
The bill has sparked controversy, even within Trump’s own party. During last Friday’s vote, five Republican lawmakers joined Democrats in opposing the bill. While the bill has moved forward due to support in the House Budget Committee, it still needs to survive further voting stages, including a trust vote, before it becomes law.
If passed, this legislation could reshape U.S. financial relations with the global diaspora, especially the Indian community which has long been a significant contributor to remittance flows worldwide.
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