Hyderabad, May 16 -- A new US proposal to impose a 5 percent tax on outbound remittances by non-citizens including NRIs has drawn sharp reactions from Indians living in America. It could significantly increase the cost of sending money home.

The move particularly impacts Indian professionals and green card holders who collectively send billions to India every year.

Indian NRIs' highest remittances come from US

If passed, the bill would require NRIs to pay USD 50 in tax for every USD 1,000 remitted to India. It would cost the Indian diaspora huge money annually.

The proposal comes as India's remittance inflows hit a record USD 118.7 billion in FY24. The US is contributing 28 percent.

Changing remittance trends

The US has emerged as I...