Big Beautiful Bill: Know how this landmark Bill could impact Indians in US, their families back home
PTC Web Desk: In a move that could significantly alter financial and migration flows between the United States and India, the US Congress has approved President Donald Trump’s sweeping 900-page legislation, dubbed the "One Big Beautiful Bill." While the Bill spans a wide array of domestic policies, its ripple effects are already being felt overseas—especially in India, where a sizable diaspora contributes billions in remittances and maintains strong socio-economic ties.
Here’s how this Bill could hit Indians living in America and their families in India
Remittances: Small tax, big impact
One of the clearest and most immediate consequences for Indians comes in the form of a new remittance tax. The Bill initially proposed a 5% levy on money sent abroad but was eventually watered down to a 1% charge in the final version. This new tax will take effect starting January 1, 2026.
While remittances sent via US-based banks and card-linked platforms are exempt, high-value or recurring transfers made by NRIs may be subject to this tax. Therefore, NRIs who frequently send or invest money in India should reevaluate their financial strategies in light of this development.
With over 4.5 million people of Indian origin residing in the US—many of whom support families or own property in India—even a 1% charge could result in significant collective costs.
No change in foreign income taxation
Despite the Bill’s broad scope, it does not introduce any changes to how foreign-sourced income is taxed for US residents, including NRIs with Green Cards or US citizenship. Rental income earned in India, for instance, will continue to be taxed under the current double taxation avoidance framework. This means NRIs can still claim a tax credit in the US for taxes paid in India. The provision preserves the existing mechanism, which ensures individuals are not taxed twice on the same income.
Tougher stance on illegal immigration
One of the Bill’s most controversial and far-reaching aspects is its emphasis on immigration enforcement. Aligned with Trump’s hardline immigration agenda, the legislation allocates billions of dollars to bolster border control and national security, including what Trump calls the “largest mass deportation operation in American history.”
Among the targets are reportedly around 18,000 Indian nationals who are believed to have entered the US without authorisation. Many of these individuals are said to have used irregular pathways, including the so-called "donkey route." In response, the Indian government has signaled willingness to cooperate with the US authorities to dismantle the human trafficking networks facilitating such migration.
While Indians constitute just a small segment of the total unauthorised population in the US—estimates range from 220,000 (US government) to 700,000 (Pew Research Centre)—the Indian share has grown over time. A study by Johns Hopkins University noted that the proportion of illegal Indian immigrants rose from 0.8% in 1990 to 3.9% in 2015, before declining slightly to 2% by 2022.
Costlier legal stay and immigration applications
The new legislation does not just target undocumented immigrants—it also places additional financial burdens on those attempting to stay in the US through legal channels. Application fees for work permits, asylum, and other humanitarian protections have been hiked significantly.
Here are some of the key changes:
Asylum application fee: Minimum $100
Employment Authorisation Document (EAD): $550
Temporary Protected Status (TPS): $500
Humanitarian parole application: $1,000
Illegal border crossing fine: $5,000
Moreover, low-income applicants will no longer be eligible for fee waivers, a move expected to disproportionately affect vulnerable immigrant communities.
Cuts to safety net programmes
The legislation includes sweeping cuts to Medicaid and other federal aid programmes. These reductions will have ripple effects on immigrant populations, many of whom rely on these safety nets for healthcare and support. Legal immigrants, especially those on temporary visas or low-income brackets, may find it increasingly difficult to access affordable healthcare and public services.
- With inputs from agencies
