U.S. legislators have considerably diluted the supply within the proposed laws to tax remittances to different nations, together with to India. The newest model of the Bill, launched on Friday (June 27, 2025), reduces the tax on remittances to 1% from the sooner proposal of 3.5%, and excludes remittances produced from bank accounts and different monetary establishments and these made through debit or bank cards from the tax.
The 1% tax will now apply solely on remittances made in money, a cash order, or a cashier’s test. According to worldwide tax specialists, it will come as a major reduction to the non-resident Indian (NRI) group within the U.S.
The ‘One Big Beautiful Bill Act’ was handed by the U.S. House of Representatives in May 2025. It is now up for debate within the U.S. Senate, following which it will likely be voted upon.
“There is hereby imposed on any remittance transfer a tax equal to 1 percent of the amount of such transfer,” the newest model of the Act says. “The tax imposed by this section with respect to any remittance transfer shall be paid by the sender with respect to such transfer.”
However, the newest draft additionally inserts extra paragraphs to the part on the tax on remittances.
“The tax imposed under subsection (a) shall apply only to any remittance transfer for which the sender provides cash, a money order, a cashier’s check, or any other similar physical instrument (as determined by the Secretary) to the remittance transfer provider,” the draft Bill mentioned.
In addition, the Bill now says that remittances produced from “an account held in or by a financial institution” and “funded with a debit card or a credit card which is issued in the United States” are exempt from the tax.
“Senate Republicans released their updated draft of the proposed One Big Beautiful Bill Act on June 27 and have a self imposed deadline of July 4 to try to pass this bill,” Lloyd Pinto, Partner – U.S. Tax at Grant Thornton Bharat mentioned. “The updated Senate version significantly changes the remittance transfer provisions that were passed by the House Republicans. In the latest Senate draft, the remittance transfer tax has been reduced to 1% from the erstwhile proposal of 3.5%.”
The 3.5% tax proposal itself was a discount introduced into the Act in May from the unique proposal of 5%.
“This (the latest relaxations) should come as a huge relief to the NRI community in the US as they will not be subject to this remittance tax if the remittances are made through accounts held with designated US banks and financial institutions or funded via debit or credit cards issued in the U.S.”
