Big relief for Indian migrants: 'Big Beautiful Bill' puts remittance tax at 3.5% after Trump's 5% threat

The US House of Representatives has passed the ‘One Big, Beautiful Bill Act’ — a sweeping tax-and-spending package that encapsulates President Donald Trump’s economic vision and marks a key milestone in his second-term agenda. Among the key provisions in the bill is a significant relief for millions of foreign workers in the US who send money abroad. The final version of the legislation reduces the controversial remittance tax from 5% to 3.5% effective January 1, 2026, according to the bill’s fine print.

This move carries particular significance for the Indian diaspora, one of the largest migrant communities in the United States. As of 2023, over 2.9 million Indian immigrants resided in the US, making it the second most popular destination for Indians globally—after the United Arab Emirates—according to data from the Migration Policy Institute. Indians also represent the second-largest foreign-born group in the US, after Mexicans, accounting for 6% of the country’s 47.8 million foreign-born residents.

Under the new bill, the remittance tax—referred to as an “excise tax”—will apply only to non-US citizens. US citizens are exempt. Those affected include green card holders and individuals on employment visas.

The remittance tax cut comes after weeks of negotiations and lobbying by advocacy groups and diaspora communities, many of whom had flagged the 5% levy as disproportionately burdensome.