*REMMITANCE TAX BY US* A proposed US bill seeks to levy a *5% tax on remittances by non-citizens,* potentially affecting NRIs sending money to India for family, education or investments. A new bill introduced by the House Republicans proposed a 5% tax on all international remittances made by non-citizens, marking a significant policy departure. The remittance tax component has stirred concern, particularly among the immigrant community in the United States, including Non-Resident Indians (NRIs). For many, sending money home is not a luxury but a necessity, supporting families, education, and long-term financial goals in India. *Why This Matters to the Indian Diaspora:-* India remains the largest recipient of remittances globally, receiving over $83 billion annually, a substantial share of which originates from the United States. The newly proposed tax could significantly impact this flow. If implemented, NRIs would lose 5% of every dollar sent back to India. For example, on a ₹1 lakh remittance (equivalent in USD), ₹5,000 would be diverted to the US Internal Revenue Service (IRS) before the money reaches its intended destination. This tax would apply regardless of the purpose, be it family support, school fees, or home loans. Previously, remittances were not taxed by the US government, making this a noteworthy reversal in fiscal policy affecting immigrants. The House aims to fast-track the bill, targeting its passage by Memorial Day (26 May 2025), and potentially enacting it into law by 4 July. If approved, the remittance tax could take effect soon after, with collection handled by financial institutions and money transfer providers. The levy would be deducted at the point of transaction, and applies universally across all legitimate remittance channels, including: Traditional bank wire transfers NRE/NRO account transactions Digital remittance platforms. This limits any scope for legal workaround or exemption. Implications for Personal and Financial Planning For NRIs, this tax introduces a new cost variable in cross-border financial transactions. Whether one is sending monthly allowances, paying for a sibling’s education, or making property investments, every transfer will now be marginally reduced in value. Key areas of concern include: Reduced transfer value: Every $1,000 remitted would incur a $50 tax. Impact on long-term planning: Property investments and educational funding may require higher remittances to meet the same financial objectives. Changes to remittance habits: Some may consider shifting from frequent small transfers to fewer, larger ones to better manage reporting and associated costs.