Trump’s ‘big, beautiful bill’ faces House vote: How it affects Indians in US and here at home

President Donald Trump’s sweeping tax-and-spending package, nicknamed the “One Big, Beautiful Bill,” is headed for a final vote in the US House of Representatives.

A major pillar of Trump’s second-term agenda, the bill has drawn criticism from both parties, particularly over concerns about rising debt and sharp cuts to welfare.

Among the bill’s most closely watched provisions is a controversial tax on foreign remittances, a move that directly impacts millions of Indians living in the United States.

Final remittance tax set at 1%

Originally, the bill proposed a 5 per cent tax on money sent abroad, including to India, but after revisions, the final version passed by the Senate on June 27 reduced this to just 1 per cent. This change offers relief to the estimated 4.5 million Indians in the US, especially the 3.2 million of Indian origin, who regularly send money back home.

The new tax will apply to

Non-citizen US residents, including Green Card holders

H-1B and H-2A visa holders

International students

How the tax works

According to the bill, a 1 per cent tax will apply to any remittance sent using cash, money orders, or cashier’s checks. Transfers made through banks or paid using US-issued debit/credit cards will be exempt. Those using qualified remittance services (as defined by the Treasury) will also avoid the tax. The tax will take effect starting January 1, 2026.

Why it’s important for India

India is the world’s top recipient of remittances, receiving $129 billion in 2023–24, nearly 28 per cent of which came from the United States. These funds play a critical role in supporting families and local economies, especially in states like Kerala, Uttar Pradesh, and Bihar. A 1 per cent remittance tax on the US transfers could cost Indian households an estimated $360 million annually, a substantial, though much smaller, amount than the nearly $1.8 billion that would have resulted from the original 5 per cent proposal. If passed by the House, the bill would mark a major legislative win for Trump, blending deep tax cuts with significant reductions in government spending. However, debate continues around the impact on working-class immigrants and the long-term effects on foreign economies reliant on US remittances.