Archive · 26 May 2025
US to India Remittances: Potential 3.5% Tax on the Horizon
If you send money from the US to India and you're not a US citizen, a new tax might take 3.5% of your money.
This tax aims to keep US money in the country.
Green card holders and those on work visas would have to pay it.
This could be a problem because many people send money home to support their families.
It may cause people to invest their money in the US instead to avoid the tax.
A proposed 3.5% tax on remittances from the US to other countries, if passed, could affect non-US citizens.
US citizens are exempt from the remittance tax.
The bill has passed the House of Representatives and awaits a Senate vote, possibly in late June or July.
Indians in the US, who send a substantial amount of money home, would be particularly affected.
The tax aims to protect the outflow of US dollars and generate additional revenue.
- Who
- Non-US citizens living in the US, including those on work visas and green card holders.
- What
- A proposed 3.5% tax on money sent from the US to other countries by non-US citizens.
- When
- Likely late June or July for a Senate vote.
- Where
- The US.
- Why
- To protect the outflow of US dollars and to generate additional revenue.
Potential Impact
Tax Implications
Investment Strategy
Potential Impact
The tax may discourage remittances, leading to increased investment within the US to avoid fees.
Tax Implications
The tax could increase salary costs for companies relocating employees and impact investments in the US markets, particularly those involving ESOPs.
- Proposed Remittance Tax Rate
- 3.5%
- Exempted from Tax
- US citizens
- Taxable Groups
- Non-US citizens (green card holders, visa holders)
- US share of India's inward remittances
- 27.7% ($32 billion in 2023-24)
- Bill Timeline
- May 2025 (House passed) , late June/July (Senate vote likely)
- Affected Group
- Indians in the US