Trump reduced remittance tax to 1%; 0 tax on sending money in this way

This is a relief news for millions of Indians living in America and working. Not only this, if any Indian NRI sends money through bank accounts, debit or credit cards, then 0 tax will be levied on it. Remittance Tax has been reduced by amending the One Big Beautiful Bill Act. In the new version of One Big Beautiful Bill, the previous 3.5% tax on money transfer has now been reduced to just 1%. This move by the Trump administration has comforted millions of Indians currently residing in America. The US House of Representatives has passed this bill. Senate Republicans released an updated draft of this bill on June 27. After the bill is passed by the Senate after the debate, it will be sent to the President for signature. This process is expected to be completed by July 4.

According to the revised bill released on June 27, 2025, the remittance tax has been reduced from the previously proposed 3.5% to just 1%. In this, money sent through bank accounts, debit, or credit cards is completely exempt from this tax. But if you send money through cash, money order, cashier's check, or other similar physical means, then you will have to pay a tax of 1% on it. But if you want to avoid this too, then you have to send money through a debit or credit card issued in the US or an account with a financial institution.

The amendment in the One Big Beautiful Bill is especially beneficial for non-resident Indians (NRIs). Lakhs of Indians work in America and send money to their families every month. In such a situation, this amended bill has brought a sigh of relief for them.

International tax experts say that this move has brought big relief to the Indian community living in America. Lloyd Pinto, US Tax Partner, Grant Thornton India, said, "The latest draft of the Senate has reduced the remittance tax from 3.5% to 1%. Also, remittances made through accounts of US banks and financial institutions or debit/credit cards issued in the US are exempt from tax. This is a huge relief for the Indian community."

Earlier in May 2025, the 5% remittance tax proposed in this bill was reduced to 3.5%. But now, once again, it has been revised to 1%. Along with this, tax exemption has also been given on transferring money through bank accounts and cards. This bill will come into effect on December 31, 2025. That means the tax levied under this bill will be applicable from January 1, 2026.