‘One Big Beautiful Bill’: What it means for India and Indians living in the US

Sending money to the country from the United States can become more expensive with a “beautiful, beautiful bill” by the United States, including a 3.5 % tax on all transfers by non -citizens.

While the United States has become the highest source of transfers to India, as it represents 27.7 % of the total internal transfers of $ 118.7 million in 2023-24, at the present time, the government is now not worrying the proposed bill. The government is also likely to analyze the impact of tax suggestion on transfers from the United States.

“We keep a close tab on developments regarding the draft law. At the present time, it is not a major concern even though India gets a large amount of internal transfers,” an official source. They also pointed out that a large part of the transfers are savings or payments by Indians who live abroad for their families in India, and this is unlikely to be affected by the tax, although the cost of the person concerned will definitely rise.

Transfers play an important role in financing the goods deficit and also helps in building a temporary store to absorb any external shocks. According to the World Bank, India has continued to appear the best transfers since 2008, as its share in global transfers increased from about 11 % in 2001 to about 14 % in 2024.

The United States initially proposed a 5 % tax on transfers as a way to protect from the dollar external flows. However, I decided to reduce it to 3.5 % now. If it is yearned, the conversion tax will be applied from January 1, 2026. It has already been approved by the US House of Representatives and is seen as the economic vision of US President Donald Trump.

This will affect any external transfers by non -citizens, such as green cards or other visa holders. “Transfer transmission providers must collect the quarterly tax and transfer it to the treasury and have a secondary commitment to unpaid taxes. The transfers that are sent by American citizens or citizens who have been verified through qualified service providers who have agreements with the treasury with social security numbers are exempt.”

Sandep Jongonwalla, tax partner in Nangia Andersen, noted that by exempting only American citizens and citizens who appreciate transfers through qualified transfer transfers provider, the proposal is not proportional to millions of legal immigrants including green card holders, work marks, and non -seasonal colors, which many financial immigrants flourish.

He also pointed out that in addition to personal transfers, the ruling can also affect compensation practices. Many foreign citizens are receiving RSU units as part of their wages packages. When these RSUs are transferred and sold, sales revenues are transferred abroad to their homeland, for personal use, family support or investment.

“Under the proposed transfer tax, such transfers even from post -tax revenue can attract tax, adding a layer of cost to the income that has already been struck,” said Shafla. If it is yearned, this ruling risk reducing the attractiveness of the United States as an international destination and investment, while raising diplomatic sensitivities and increasing the challenges of compliance with both individuals and labor institutions, as he warned about that.