Impact of Trump's Tax Bill on the Indian Community in the US
Positive Changes for Indians in the US
The recent tax proposal known as 'One Big Beautiful Bill' by US President Donald Trump is set to bring significant advantages to the Indian community residing in the United States. A major highlight of this bill is the reduction in tax rates, particularly for Indians, who will see a decrease from 5% to just 1% once the legislation is enacted.
Benefits for International Money Transfers
One of the key areas of improvement under this new bill is the taxation on international money transfers. The revised provisions aim to ease the tax burden on remittances, which is particularly beneficial for countries like India, where many expatriates send money back home. This change is a welcome relief for Indian professionals and the NRI community in the US, who will now enjoy a lower tax rate on their remittances.
Changes in Remittance Tax
Previously, the proposed legislation included a 5% tax on money sent to countries such as India. However, the latest draft, released on June 27, has significantly lowered this rate to 1%. Earlier versions of the bill had suggested a tax rate of 3.5%.
Who Will Benefit from the New Tax Rules?
The new tax regulations will apply to foreign nationals residing in the US who are not citizens, including green card holders, temporary visa holders (like H-1B and H-2A), and international students.
Estimated Beneficiaries Among Indians
Approximately 4.5 million Indians living in the US, including around 3.2 million individuals of Indian origin, are expected to benefit from this tax amendment. The new tax provisions will cover all forms of remittances, including cash, money orders, and cashier's checks.
Details of the Bill
The updated draft of the bill specifies that 'Every international money transfer will incur a tax of 1% on the total amount, payable by the sender.'
Tax Exemptions Proposed
Additionally, the bill suggests tax exemptions for remittances made from accounts held at financial institutions and those funded via debit or credit cards issued in the United States.