US IMPOSES 5% TAX ON NRI REMITTANCES

For NRIs, new tax on every transaction could have profound financial implications. People need to be more watchful as there is going to be a juggle between supporting family and managing finances

- PRESS TRUST OF INDIA

The cost for Indians in US sending money back home will rise, with their total annual outgo is likely to cross USD 1.6 billion as the Trump administration plans to impose a 5 per cent tax on outward remittances.

The estimated outgo is based on data for the 2023-24 period compiled from a recent RBI article.

In President Donald Trump's big priority bill, there is a proposal for a 5 per cent excise tax on remittance transfers that would cover more than 40 million people, including those holding green cards and HIB visas. The proposed levy won't be applicable for US citizens.

India’s remittances have more than doubled from USD 55.6 billion in 2010-11 to USD 118.7 billion in 2023-24, according to a recent article published in the Reserve Bank's March Bulletin.

The article highlights findings of the sixth round of India's remittances survey conducted for 2023-24. The fifth round of the survey conducted for 2020-21 was published in July 2022.