Indian students studying in the United States have received great news. US President Donald Trump’s new law called the One Big Beautiful Bill Act has made a major change that will benefit Indians living abroad, especially students and young professionals.
The bill, which recently cleared an important vote in the US Senate, has reduced the tax on money transfers (remittances) from the US to India from a proposed 5% to just 1%. This is a huge relief for Indian students who often send money back home or receive funds from their families to support their education and living expenses.
What Exactly is This Remittance Tax?
A remittance tax is a charge applied when someone sends money from one country to another. In this case, the tax applies to money sent from the US to countries like India only if sent using cash, money orders, or cashier's checks.
But there’s good news the tax does not apply to money sent using bank transfers, debit cards, or credit cards. This makes it easier for Indian students who usually rely on these safer and faster methods to send or receive funds from their families.
Why This Matters for Indian Students
The reduction in remittance tax offers significant relief for Indian students studying abroad. The following is how the lower rate benefits them:
-
Lower Financial Burden: Students studying on F-1 visas already manage high tuition fees and living costs. A 5% remittance tax would have increased their financial stress. Reducing it to 1% makes a big difference.
-
Helps Indian Families: Many students receive financial help from their parents in India. With the reduced tax rate and bank exemptions, families can continue to support their children without heavy extra costs.
-
Smooth Money Transfers: Since transfers via bank accounts and cards are not taxed, students can continue to send or receive money through online banking without worry.
Related Stories
Background and Importance
As of 2023, nearly 2.9 million Indians lived in the US, including thousands of students and temporary workers. According to the World Bank, India received $129 billion in international remittances in 2024, 28% of that came from the US alone.
States like Kerala, Bihar, and Uttar Pradesh rely heavily on this money sent from abroad. So, any increase in remittance tax could have affected families back in India too.
Current Status of the Bill
Trump’s One Big Beautiful Bill is more than just a remittance policy. It also includes funding for the US military, deportation rules, and a border wall. It has passed one vote in the Senate and may become law by July 4. However, the bill is also getting a lot of criticism for cutting healthcare and clean energy funding.
Comments
All Comments (0)
Join the conversation