A new tax proposal introduced by the House of Republicans could significantly affect Non-Resident Indians (NRIs) in the United States. The bill, introduced on May 12, 2025, includes a provision imposing a 5% tax on international money transfers made by non-citizens. This shift in U.S. tax policy aims to fund tax breaks and border security initiatives but will impact the financial support many NRIs provide to their families, particularly in India, the world’s top recipient of remittances.
If passed, the tax could mean a direct reduction in the money NRIs send home, with $5,000 going to the IRS for every ₹1 lakh sent. The bill is expected to pass through the House by May 26, 2025, and potentially become law by July 4, 2025. This change will affect financial planning for NRIs, especially those sending money for family support, education, or property purchases.
