Sending money from the US to India may become expensive. There is a proposal to impose a 3.5% excise duty on remittances. The US House of Representatives has passed a bill. This will hurt families receiving money in India. India is the largest recipient of remittances. Experts say that to avoid tax, send large amounts less frequently.
New Delhi: This work may soon become expensive for the immigrants sending money from America to India. The reason is that there is a proposal to impose a 3.5% excise tax on remittances. The US House of Representatives has passed the ‘One Big Beautiful Bill’. It includes this provision targeting non-US citizens. This tax will cause financial loss to the families receiving money in India. India is the largest receiver of remittances in the world. Experts suggest that to reduce the tax burden, it would be better to send large amounts less frequently instead of sending small amounts.
This work will soon become expensive for the immigrants sending money from America to their home. There is a proposal to impose a 3.5% excise tax on remittances. This means that if someone transfers Rs 83000 from America to India, then Rs 2,900 will be deducted in tax. The US House of Representatives has passed the ‘One Big Beautiful Bill’. Initially this tax was proposed to be 5%, which would be in addition to the existing income tax. This move can affect H-1B, L-1, F-1 visa and even green card holders.
Increased tension among Indian immigrants
Indian immigrants are concerned that this can significantly increase the cost of supporting their families in India. This tax has not been implemented yet. But, it is part of the ‘One Big, Beautiful Bill Act’. Its purpose is to regulate the movement of global money with the increase in digital transactions. For many people, these remittances are not just financial transactions, but a lifeline.
India is the largest recipient of remittances globally. It received about $33 billion from the US in the financial year 2023-24. This is about 28% of its total remittances. A reduction in remittances could lead to significant economic challenges for many families. They depend on such funds for their daily needs.
Experts gave this opinion
Analysts say the proposed tax will affect developing countries that depend on remittances. This could affect household spending, small businesses and national reserves. Remittances are a significant part of foreign income in India, Mexico, the Philippines and Nigeria.
A reduction in remittances could have widespread economic effects. Due to this, families may struggle to meet basic needs. A possible reduction in remittances could also affect small businesses that depend on these funds for investment and growth.
For individuals who regularly send money abroad, experts suggest sending large amounts less frequently instead of sending smaller amounts to reduce the potential tax burden.
Using digital wallets and peer-to-peer platforms could also be an option. However, these avenues depend on how the law is ultimately drafted.
The post Income tax: You will have to pay so much tax on a transfer of Rs 83,000, what kind of blow is this for Indians? first appeared on informalnewz.
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