‘Big, Beautiful Bill’ Explained: Is Trump’s Latest Law A Game Changer For Indians Abroad? All You Need To Know | India News
President Donald Trump has praised the broad tax and spending bill, which Congress passed in the early hours of Friday, as one of the most successful bills in the history of America. The wide-ranging bill will now be signed into law by the President later today, although its actual real-world impact is expected to differ considerably between various industries, income levels, and regions.
The historic bill makes permanent the 2017 Trump tax cuts, restores some business deductions, reverses incentives for green energy, and institutes deep cuts in federal safety net programs. The bill is generally believed to bring significant benefits to corporations, top earners, and certain categories of workers, but other groups – low-income Americans, hospitals, and clean energy companies – are likely to suffer disadvantages.
Implications For Indians In The US
One major concession in the bill’s final reading is a relief to the Indian diaspora. The initial plan had envisaged a 5 percent tax on remittances made to countries abroad such as India. This has been drastically lowered to only 1 percent in the bill’s final reading, bringing immense relief to an estimated 4.5 million Indians who are settled in the US, out of whom 3.2 million are of Indian origin.
The remittance tax, according to the bill, levies “a tax equal to 1 percent of the amount of such transfer” that shall “be paid by the sender.” This provision will cover US residents who are not citizens, including Green Card holders, H-1B and H-2A visa holders, and foreign students.
But, while the tax will target transfers made in cash, money orders, or cashier’s checks, the transfers made through financial institutions or by way of US-issued debit/credit cards and using a ‘qualified remittance transfer service’ are exempt. This provision for a 1 percent tax, a cut from an initial House draft of 3.5 percent and the initial 5 percent, will target transfers initiated after December 31, 2025.
Remittances: India’s Lifeline
Remittances are an important source of foreign earnings for India, sustaining millions of families and strengthening the overall economy of the country. According to data as of 2023, about 2.9 million Indians were living in the United States, which was the second-largest immigrant community there, reported the Migration Policy Institute. India got a record $129 billion in remittances in 2023-24, the highest in the world, of which 28 percent came from the U.S. alone, according to World Bank statistics. The share of India accounted for 14.3 percent of world remittance flows in the same year, the highest by a nation in the 21st century.
For Kerala, Uttar Pradesh, and Bihar, these remittances are not only beneficial but are viewed as vital to day-to-day survival and financial well-being by many families.
The passing of this bill represents a signature legislative achievement of President Trump’s presidency, striking a balance between deep tax cuts and steep cuts in government expenditure, aligning with his long-term economic and fiscal policy goals.
