A new tax bill by the House of Republicans proposes a 3.5% excise tax on all outbound remittances made by non-U.S. citizens, including H-1B, L-1, and F-1 visa holders. It’s currently pending Senate approval, but if passed, could become law by 1 January 2026.
This tax will apply no matter how much money is sent and would be withheld at source by remittance providers like banks and money transfer services, including NRE/NRO accounts.
Each transaction will incur a tax of 3.5%, which translates to USD 35 on every USD 1,000 sent. This will reduce net inflows for recipient families and will affect how NRIs invest money in India or support family members.
It is also not covered under the India–U.S. DTAA, as it is not an income tax.
However, some low to middle-income taxpayers may be eligible to claim a refundable tax credit for the tax paid, subject to specific conditions.
This podcast explains the proposed bill in more details. Take a listen to learn about what exactly the bill entails, how it effects the global economy and NRIs and what you should do next.
If this bill is approved, it’s clear money transfer habits and financial planning will need to adapt along with it.
If you want to know more or need any advice, please send us an email at contact@venturapranas.com.
