The latest US Senate draft of the One Big Beautiful Bill Act, released on June 27, has reduced the proposed remittance transfer tax to 1% from the earlier 3.5%, marking a major revision from the House version of the bill.The updated proposal, put forth by Senate Republicans with a self-imposed deadline of July 4 for passage, excludes bank and card-based transfers from the tax net. Under the new draft, the tax will apply only to remittances made via cash, money orders, cashier’s checks or similar physical instruments, said Lloyd Pinto, Partner – US Tax, Grant Thornton Bharat.
“This should come as a huge relief to the NRI community in the US,” Pinto said. “They will not be subject to this remittance tax if the remittances are made through accounts held with designated US banks and financial institutions or funded via debit or credit cards issued in the US.”
The remittance transfer tax, if passed, will come into effect after December 31, 2025. The measure is part of a broader Republican-led legislative effort to overhaul fiscal policy and tax enforcement, but remains subject to negotiation between the House and Senate.The bill’s current language narrows the tax’s application, softening concerns within diaspora communities and among cross-border remittance providers.
