The controversial immigrant remittance tax has been further reduced to 1% in the latest version of the bill as introduced in the Senate, reports Politico.
Trump’s One Big Beautiful Bill has introduced a ‘tax on remittance’ made by immigrants living in America. The US House of Representatives enacted the ‘One Big Beautiful Bill Act’ in May 2025. It is now being debated in the United States Senate and will be voted on.
Called the ‘Excise tax on remittance transfers’, the newly proposed provision initially imposed a 5% excise tax on remittance transfers. Before being passed by the House, there were some amendments to it. The tax on remittance was reduced to 3.5% of the amount remitted by immigrants to their home countries, including India.
However, now, as per the draft of the bill introduced in the Senate, the tax on remittance has been proposed to be further reduced to 1%.
The most recent version of the Bill, released on Friday, June 27, 2025, lowers the tax on remittances to 1% from the previous plan of 3.5%, and exempts remittances made from bank accounts and other financial institutions, as well as those made with debit or credit cards, from the tax, reported The Hindu.
The 1% tax will now only apply to remittances made in cash, money order, or cashier’s check. The US government’s newly introduced remittance tax will not apply to US citizens or nationals who use a ‘qualified remittance transfer service’.
In addition, the Bill now states that remittances sent from “an account held in or by a financial institution” and “funded with a debit card or a credit card issued in the United States” are tax deductible, adds The Hindu report.
NRIs, H-1B personnel, and Indian students will be the most affected by the remittance tax, and they may consider transferring their US-accumulated profits to India to avoid paying excise taxes on remittances, as this act, if passed, will go into force on January 1, 2026.