With no minimum threshold and exemptions only for verified US citizens, the tax could significantly impact Indian professionals, especially those on work visas.
For many expats, remittances back home aren’t optional – it’s how they repay student loans, support parents, and stay connected to home. These transfers are more than just currency. They provide comfort, security, and continuity for the families left behind.
This is the sentiment shared by Ankita, who, like many Indian working professionals in the US, has found the Trump administration’s move to levy a 5 per cent tax on outbound remittances a hard pill to swallow. With living costs and visa uncertainties already on the rise, experts suggest that the added financial burden from such taxation could jolt many out of the American dream.
The provision outlined in the One Big Beautiful Bill, which is expected to come into effect in June, does not specify a minimum transaction threshold. It, however, provides an exemption for “verified US citizens or US nationals.”
“Employees already facing high costs of living and uncertain visas could have their discretionary income lowered and their cost of living increased by a special tax on such transfers that can be perceived as punitive,” says Srishti Oberoi, Practising Advocate at District Courts Yamunanagar and Punjab & Haryana High Court.
In 2023, overseas Indians sent about $120 billion in remittances, with a substantial portion originating from the US. A recent survey from the Reserve Bank of India indicated that the US accounted for the largest share of remittances to India in 2023–24, contributing 27.7 per cent.
While the tax would not directly alter immigration statuses, Srishti suggests that it could affect the way brilliant workers balance foreign opportunities. “The U.S. has long been a top choice for Indian professionals, thanks to its salaries and career opportunities. But if remittances are taxed, many may start looking more seriously at alternatives like Canada or the UK,” she added.
The tax could also hit young working professionals repaying hefty education loans. Indian students heading to the U.S. borrow an average of ₹40.6 lakh for a master’s degree, according to a 2023 Foreign Admits study. Loans for U.S. studies account for 50–75 per cent of India’s total education loan disbursements.
“Many of my friends send most of their salary home to repay massive loans. This tax would hit them hardest—and could make the U.S. a less attractive option,” said Rajeev (name changed), a 24-year-old software engineer in San Francisco.
The new remittance tax may also have ripple effects beyond individual employees and impact key sectors. The Bill’s passage could dampen NRI-driven housing demand, impacting developers relying heavily on such bookings. Similarly, the startup ecosystem, which relies heavily on funding from international sources, could also take a hit.
“Both India’s real estate sector and startup ecosystem rely heavily on NRI inflows. Increased transaction costs may discourage property investments by NRIs, potentially dampening demand in the real estate markets. Similarly, early-stage startups, which often depend on cross-border angel investments, may face funding slowdowns as remittances become costlier and administratively burdensome.”, says Dr. Arvind Singhatiya, Founder & CEO, LegalKart.
(Report filed by BL intern Rohan Das)
Published on May 22, 2025
With no minimum threshold and exemptions only for verified US citizens, the tax could significantly impact Indian professionals, especially those on work visas.
For many expats, remittances back home aren’t optional – it’s how they repay student loans, support parents, and stay connected to home. These transfers are more than just currency. They provide comfort, security, and continuity for the families left behind.
This is the sentiment shared by Ankita, who, like many Indian working professionals in the US, has found the Trump administration’s move to levy a 5 per cent tax on outbound remittances a hard pill to swallow. With living costs and visa uncertainties already on the rise, experts suggest that the added financial burden from such taxation could jolt many out of the American dream.
The provision outlined in the One Big Beautiful Bill, which is expected to come into effect in June, does not specify a minimum transaction threshold. It, however, provides an exemption for “verified US citizens or US nationals.”
“Employees already facing high costs of living and uncertain visas could have their discretionary income lowered and their cost of living increased by a special tax on such transfers that can be perceived as punitive,” says Srishti Oberoi, Practising Advocate at District Courts Yamunanagar and Punjab & Haryana High Court.
In 2023, overseas Indians sent about $120 billion in remittances, with a substantial portion originating from the US. A recent survey from the Reserve Bank of India indicated that the US accounted for the largest share of remittances to India in 2023–24, contributing 27.7 per cent.
While the tax would not directly alter immigration statuses, Srishti suggests that it could affect the way brilliant workers balance foreign opportunities. “The U.S. has long been a top choice for Indian professionals, thanks to its salaries and career opportunities. But if remittances are taxed, many may start looking more seriously at alternatives like Canada or the UK,” she added.
The tax could also hit young working professionals repaying hefty education loans. Indian students heading to the U.S. borrow an average of ₹40.6 lakh for a master’s degree, according to a 2023 Foreign Admits study. Loans for U.S. studies account for 50–75 per cent of India’s total education loan disbursements.
“Many of my friends send most of their salary home to repay massive loans. This tax would hit them hardest—and could make the U.S. a less attractive option,” said Rajeev (name changed), a 24-year-old software engineer in San Francisco.
The new remittance tax may also have ripple effects beyond individual employees and impact key sectors. The Bill’s passage could dampen NRI-driven housing demand, impacting developers relying heavily on such bookings. Similarly, the startup ecosystem, which relies heavily on funding from international sources, could also take a hit.
“Both India’s real estate sector and startup ecosystem rely heavily on NRI inflows. Increased transaction costs may discourage property investments by NRIs, potentially dampening demand in the real estate markets. Similarly, early-stage startups, which often depend on cross-border angel investments, may face funding slowdowns as remittances become costlier and administratively burdensome.”, says Dr. Arvind Singhatiya, Founder & CEO, LegalKart.
(Report filed by BL intern Rohan Das)
Published on May 22, 2025
It is a long established fact that a reader will be distracted by the readable content of a page when looking at its layout. The point of using Lorem Ipsum is that it has a more-or-less normal distribution of letters, as opposed to using ‘Content here, content here’, making it look like readable English. Many desktop publishing packages and web page editors now use Lorem Ipsum as their default model text, and a search for ‘lorem ipsum’ will uncover many web sites still in their infancy.
It is a long established fact that a reader will be distracted by the readable content of a page when looking at its layout. The point of using Lorem Ipsum is that it has a more-or-less normal distribution of letters, as opposed to using ‘Content here, content here’, making it look like readable English. Many desktop publishing packages and web page editors now use Lorem Ipsum as their default model text, and a search for ‘lorem ipsum’ will uncover many web sites still in their infancy.
The point of using Lorem Ipsum is that it has a more-or-less normal distribution of letters, as opposed to using ‘Content here, content here’, making
The point of using Lorem Ipsum is that it has a more-or-less normal distribution of letters, as opposed to using ‘Content here, content here’, making it look like readable English. Many desktop publishing packages and web page editors now use Lorem Ipsum as their default model text, and a search for ‘lorem ipsum’ will uncover many web sites still in their infancy.
It is a long established fact that a reader will be distracted by the readable content of a page when looking at its layout. The point of using Lorem Ipsum is that it has a more-or-less normal distribution
Copyright BlazeThemes. 2023
