- What is "The One Big, Beautiful Bill"?
- Does This Affect Indians Investing in U.S. Stocks from India?
- Impact on Indian remittances
- What's next?
The U.S. House of Representatives on May 22, 2025, passed legislation known as "The One Big, Beautiful Bill" (H.R. 1). This comprehensive tax reform package, reflecting President Donald Trump’s economic vision, includes a significant new provision: a reportedly 3.5% tax on international money transfers made by non-US citizens.
This move is expected to have a considerable financial impact on many, including a large number of Indians residing in the U.S. and potentially those remitting investment gains from the U.S. However, this tax is not expected to apply to Indian residents investing in U.S. stocks and withdrawing their money to bring it back to India.
Let’s take a deep dive to understand what this bill is, what it proposes and how it will impact Indians.
What is "The One Big, Beautiful Bill"?
"The One Big, Beautiful Bill" is a substantial, 1,116-page legislative package aimed at overhauling the U.S. tax code. It encompasses a wide range of tax and spending measures. One of the most talked-about elements is the introduction of a new excise tax on remittance transfers.
What it proposes: A 3.5% tax on money sent abroad by individuals who are not U.S. citizens or nationals, including H-1B visa holders and green card holders. This is a revision from the original 5% tax suggested earlier, according to news reports.
How it works: Money transfer services (like banks or remittance companies) will collect this tax from the sender at the time of the transfer and send it to the U.S. government.
Who is exempt: Verified U.S. citizens and U.S. nationals do not have to pay this tax if they use a provider that has an agreement with the U.S. Treasury to confirm their status. The tax applies to all transfer amounts, big or small.
Does This Affect Indians Investing in U.S. Stocks from India?
No—this tax is not aimed at capital repatriation from investments. Your US stocks withdrawals will remain unaffected.
While the new tax targets personal remittances, such as sending money to family members, it does not cover investment-related fund transfers. Here’s how the two differ:
| Personal Remittance | Capital Repatriation (Unaffected by new bill) |
| Funds sent for personal or family support | Proceeds from sale of financial investments |
| Typically sent via remittance services like Western Union, Wise, etc. | Typically transferred by brokerage firms to bank accounts |
| Explicitly in scope of the tax | Not explicitly mentioned in the bill |
Key Clarification:
If an Indian resident investor sells U.S. stocks and transfers the proceeds directly from a U.S. brokerage account to their Indian bank account, this is considered investment repatriation, not a remittance, and is not subject to the 3.5% excise tax.
Impact on Indian remittances
This new tax is expected to be a significant financial burden for the nearly 4.5 million Indians living in the U.S., of whom around 3.2 million are of Indian origin.
- Annual Remittances: A Reserve Bank of India (RBI) remittance survey published in March 2025 indicated that the U.S. accounted for nearly 28% of India's total remittances of $118.7 billion in FY24. This calculates to approximately $32.9 billion.
- New Tax Outflow: A 3.5% tax on these remittances could mean an additional $1.12 billion in taxes paid by the Indian community annually.
- Individual Impact: For an individual sending $1,000 to family in India, this tax would mean an extra $35 deducted. Over time, these costs can add up.
What's next?
It's important to note that while the U.S. House of Representatives has passed "The One Big, Beautiful Bill," it is not yet law. The bill must now go to the U.S. Senate for consideration. If the Senate passes it, it would then need to be signed by the President before it comes into effect.
Trump is pushing the Senate to act quickly, posting on social media, “"It's time for our friends in the United States Senate to get to work, and send this Bill to my desk AS SOON AS POSSIBLE!"
Meanwhile, Democrats, who do not hold the majority in either chamber, have strongly opposed the bill, especially its proposed changes to Medicaid and SNAP benefits. House Minority Leader Hakeem Jeffries slammed it as a “reckless, regressive, and reprehensible GOP tax scam,” vowing to make it a key issue in the upcoming midterm elections.
Disclaimer:
The content is meant for education and general information purposes only. Investments in the securities market are subject to market risks, read all the related documents carefully before investing. Past performance is not indicative of future returns. The securities are quoted as an example and not as a recommendation. This in no way is to be construed as financial advice or a recommendation to invest in any specific stock or financial instrument. The Company strongly encourages its users/viewers to conduct their own research, and consult with a registered financial advisor before making any investment decisions. All disputes in relation to the content would not have access to an exchange investor redressal forum or arbitration mechanism. Registered office address: Office No. 507, 5th Floor, Pragya II, Block 15-C1, Zone-1, Road No. 11, Processing Area, GIFT SEZ, GIFT City, Gandhinagar – 382355. IFSCA Broker-Dealer Registration No. IFSC/BD/2023-24/0016, IFSCA DP Reg No: IFSC/DP/2023-24/010.