Donald Trump's 5% tax on overpayments: What is 'one, big, beautiful account', which means for India | Today news

The Trump administration intends to impose a 5 percent tax on outward overpayments. In President Donald Trump’s major priority bill, there is a proposal for a 5 percent excise tax on transfers that would cover millions of people, including those who own green cards and H1B visas. Transfers are typically transferred from a well -meaning individual or family member to another individual or household. According to the World Bank, the movement of funds from the country of work is back to a homeland known as overpayments. What is Trump Admn’s new overpayment bill? In a provision proposed in terms of the one, Big, Beautiful Bill “, it is said: ‘This provision places a five percent -axial tax on transfers that will be paid by the transmitter in respect of such transfers.’ The overpayment is applied to any international overpayment unless the transferor is a ‘verified US transmitter’. “The provision requires the tax to be collected by the providers of transfer providers and that the providers of transfer providers are responsible for surrendering such taxes to the Treasury Secretary,” it states. In particular, no minimum limit has been set in the proposed bill. This means that even small transactions will be taxed unless the sender qualifies as a ‘verified US transmitter’, defined as a US citizen or national. This tax will withhold the transfer service provider at the point of transfer, which affects both traditional bank transfers and NRE/NGO account transactions. “The provision also provides a refundable tax credit for any excise tax that must be paid by taxpayers with a valid number for social security. Finally, the provision also has an anti-Conduit rule,” the proposed bill reads. The proposed levy does not apply to US citizens. The bill reads: “The provision also creates an exception for transfers sent by verified US citizens or US citizens through qualified transfer providers.” How will this affect Indians? If the proposal is approved, the cost to Indians in the US will return money. Over -paying has long been a critical source of income for low and middle income countries, and has continued to exceed foreign foreign investment flow (FDI) flow and ODA. Credit: World Bank An article published in the Reserve Bank’s March Bulletin said: ‘The US share in India’s total overpayments remained the largest and rose from 23.4 percent in 2023-24 in 2020 per cent in 2023-24.’ There are nearly 54 lakh overseas Indians in the US, including about 33 lakh people of Indian origin (PIOs), according to the data of the Foreign Ministry. Most of these individuals are in the US on temporary work visas such as H-1B and L-1, or are green card holders who have not yet acquired citizenship, FirstPost reports. The World Bank said in December 2024 India was the most important recipient of overpayments since 2008, with its share of world payments rising from about 11 percent in 2001 to about 14 percent in 2024. Pakistan ($ 33 ​​billion), “the World Bank said.