Trump’s New 5% Remittance Tax: Why Indian Professionals in the US Should Be Concerned

Trump’s New 5% Remittance Tax: A new tax proposal in the United States has triggered concern among thousands of Indian professionals living and working there. The Trump-backed legislation seeks to impose a 5% tax on all remittances sent to foreign countries by non-US citizens—including those on H-1B, H-2A visas, and even Green Card holders.

As experts in NRI taxation, income tax filing, and cross-border financial regulations, SS Auditors is breaking down what this means for you—and how you can plan better to protect your hard-earned income.

📌 What Is the New US Remittance Tax?

On May 12, 2025, the US House of Representatives introduced a legislative package called "The One Big Beautiful Bill." One key provision? A 5% excise tax on money transfers (remittances) sent abroad by non-US citizens.

That includes:

• Indian professionals on H-1B and H-2A visas

• Green Card holders

• International workers on temporary or permanent status

  
  

How Will It Affect You?

If this bill becomes law, sending $1,000 to India would cost an additional $50 in remittance tax. This could reduce the amount Indian families receive—or force senders to pay more to maintain the same level of support.

💸 Why Should Indian Professionals in the US Be Worried?

India is the largest recipient of international remittances, receiving $129 billion in 2024, with 28% of those funds coming directly from the United States. A tax like this could cause:

• Reduced remittance flows to India

• Higher financial strain on professionals

• A possible decline in the Indian rupee’s value
  

At SS Auditors, we help clients optimize their tax strategies both in India and abroad. If you're impacted, consider speaking with our team for financial planning that keeps you protected.

Trump’s New 5% Remittance Tax:📉 Economic Impact on India

According to the Global Trade Research Initiative (GTRI):

• A 10–15% drop in remittances could result in a $12–18 billion annual shortfall for India.

• The Reserve Bank of India (RBI) may be forced to intervene more frequently to stabilize the currency.

• The rupee may depreciate by ₹1–₹1.5 per US dollar.
  

This decline directly affects millions of households in states like Kerala, Uttar Pradesh, and Bihar, where remittances support education, healthcare, and housing.

🛑 Double Taxation? Experts Raise Red Flags

Many tax experts and economists argue that this move represents double taxation, since remittances are made after income tax has already been paid in the US.

One chartered accountant estimated that this bill could cost India $1.6 billion annually, considering that 45 lakh Indians in the US sent back $32 billion in 2023–24 alone.

If you’re concerned about double taxation and your compliance in both India and the US, book a consultation with our experts in international taxation.

🧠 What Can You Do?

If you are an Indian professional in the US—or have family there—here’s what you can do now:

1. Evaluate your remittance plans and factor in a potential 5% tax.

2. Consult a financial advisor to restructure your income and expenses.

3. Ensure compliance with Indian tax regulations to avoid penalties on foreign income.
   

Let SS Auditors assist you with:

• NRI Tax Filing Services

• Foreign Income Reporting

• Cross-border Financial Planning
  

🌐 MAGA Politics & Social Media Outrage

The bill has also stirred political and social debate in the US. Some MAGA supporters argue that a 5% tax is "too low", calling instead for 50% or even 100% to force immigrants to “self-deport.”

Mexican President Claudia Sheinbaum has publicly condemned the move, calling it “unacceptable” and urging countries with large immigrant populations to raise their voices.

📣 Final Thoughts: Stay Informed, Stay Protected

While the remittance tax is still in the proposal stage, its potential impact on Indian professionals—and their families back home—is significant. Whether you are on a work visa, a Green Card, or planning to send money to India soon, it’s important to prepare now.

At SS Auditors, we’re here to help you navigate these complex global financial regulations.

👉 Get expert advice today