US President Donald Trump’s ‘One Big Beautiful Bill,’ will positively impact the Indian diaspora in the country. The key benefit for Indians is the proposed tax cut, which they will enjoy once the bill takes effect. Indians in the US are happy that the proposed tax has been reduced from 5% to 1%.
International money transfer
International money transfer is the area where we will benefit under the new bill. The bill has relaxed the provisions related to the tax on international money transfer. This could benefit many countries including India, where a large number of migrants send money home- A relief for the Indian professionals working In America and NRI community. They will benefit from a tax reduction, with the proposed rate decreasing from 5% to 1%.
Remittance tax
The earlier proposed bill had imposed a 5% tax on money sent to countries like India, but in the revised draft that came on June 27, Trump had reduced it to just 1%. The tax rate was brought down to 3.5 per cent in the House version of the bill earlier.
Who Will Benefit?
This rule will be applicable to foreign nationals living in the US who are not US citizens, such as green card holders, those working on temporary visas (H-1B, H-2A etc.), and international students.
How Many Indians Will Benefit?
About 45 lakh Indians living in the US, including about 3.2 million Indian-origin people will benefit from this amendment. This tax provision will apply to all types of remittances such as cash, money orders, and cashier’s checks.
What The Bill States
The new draft clearly states, “Every international money transfer will be taxed at 1% of the total amount, which will be payable by the sender.”
Tax Exemption
The bill also proposes tax exempt to the remittances made from “an account held in or by a financial institution” and those “funded with a debit card or a credit card issued in the United States”.
