Home > News > NRILast Updated: May 18th 2025
Newly proposed Trump 5% Outward Remittance Tax in USA
The US government's House Budget Committee, Chaired by Jodey Arrington (R-Texas) released the new "a big and beautiful bill".
One of the key and most controversial chapter is "Subchapter C — Remittance Transfers > Section #4475: IMPOSITION OF TAX". The chapter is all on imposing a new remittance tax on remittances to specific* countries, which would have an impact on countries like India. Read more.
The US government's contemplation of imposing a new remittance tax on remittances to specific countries would have an impact on countries such as India.
The global uncertainty resulting from a series of conflicts, the impact of AI on employment, the Tariff war, and other factors, the majority of Indian immigrants desire to transfer their savings to their homeland. A 5% loss of this remittance money is a substantial amount, given the trend of remittances to India surpassing USD 125 billion (from all around the world) in CY 2024.
All remittances transferred by a non-immigrant visa holder, such as H1B visa recipients and Green Card holders, would be subject to a 5% tax under the proposed Trump bill. This bill would not affect US citizens who remit money outside of the United States.
The proposed bill is analogous to TCS (Tax Collected @ Source) that is imposed on Indian outward remittances. However, the TCS in India can be claimed as a tax credit, whereas the 5% remittance tax in the United States cannot be claimed in US tax returns, as it stands today.
Although this new US remittance tax would affect all remittances made by US non-immigrant visa holders, including H1B and Green Card holders, it would not deter individuals from remitting to India, as the country's economy is expanding and there are very few alternatives in the United States that are attractive to immigrant population. The majority of Indian green card holders are interested in investing in India's stock market and luxury real estate, as US citizenship is a mirage for the majority of them.
Given the economic issues in US and Trump's new government's efforts to steer from growing deficit, no wonder this bill get passed in or around July 2025.
EZTax recommends every NRI or immigrant aware of the direction of de-globalisation that started in 2022 (post-COVID) to plan their finances accordingly.
Source(s): https://budget.house.gov/
Through a notification, "One Big Beautiful Bill Act". More @ https://budget.house.gov/
