&w=3840&q=100)
US Senate lowers proposed remittance tax to 1%, spares bank transfers
The US Senate has softened its proposed remittance tax, cutting the rate to 1 per cent and sparing most bank account and card transfers — a move that will come as major relief for millions of Non-Resident Indians (NRIs) and other immigrant communities who regularly send money home. The tax would start applying to remittance transfers made after December 31, 2025 as per the proposal.
A new draft of the "One Big Beautiful Bill", released on June 27, shows big changes from the earlier version passed by the House of Representatives. The tax was originally proposed at 5 per cent in the House bill under the Trump administration before being reduced to 3.5 per cent and now further lowered to 1 per cent in the Senate draft.
But crucially, this tax will only apply to cash or similar physical payments handed over to money transfer providers. Transfers done through bank accounts or debit and credit cards issued in the US won't be taxed. The bill says the tax is 'limited to cash and similar instruments… only to any remittance transfer for which the sender provides cash, a money order, a cashier's check, or any other similar physical instrument.'
And it specifically states the tax will not apply when money comes from 'an account held in or by a financial institution' that meets US regulatory standards, or when funded with 'a debit card or a credit card which is issued in the United States'.
Lloyd Pinto, Partner – US Tax, Grant Thornton Bharat, said, 'Senate republicans released their updated draft of the proposed One Big Beautiful Bill Act on Jun 27 and have a self imposed deadline of July 4 to try to pass this bill.... This should come as a huge relief to the NRI community in the US as they will not be subject to this remittance tax if the remittances are made through accounts held with designated US bank and financial institutions or funded via debit or credit cards issued in the US.'
India is the largest recipient of remittances from the United States. In 2023-24, India received $32.9 billion from the US alone, accounting for 27.7 per cent of its total inward remittances, according to Reserve Bank of India data. Overall, India's remittances have more than doubled over the past decade, growing from $55.6 billion in 2010-11 to $118.7 billion in 2023-24.
Earlier, concerns were raised by immigrant communities and policy experts over the House proposals, as the higher tax rates threatened to increase costs for millions of families depending on cross-border money transfers.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
an hour ago
- Time of India
'Maintain balanced work-life schedule': Infosys sends message to staff even as Narayana Murthy advocates '70-hour work week'
Infosys has sent personalised emails to staff members, requesting them to maintain standard working hours. Even as Infosys founder NR Naryana Murthy calls for Indians to work 70 hours a week, the IT services giant has flagged employees working extended hours, stressing on the need for work-life balance. Infosys has started a campaign to caution staff about extended working hours during remote work periods, highlighting potential health concerns and emphasising the importance of maintaining work-life equilibrium. Infosys has sent personalised emails to staff members, requesting them to maintain standard working hours. "We must work for 9.15 hours a day for five days a week, and if we overshoot this while working remotely, it prompts a trigger," an employee was quoted as saying in an ET report. The email indicates that the employee's monthly average working hours exceeded the company's prescribed duration. Infosys Monitors Work From Home Hours The human resources department monitors remote working hours monthly. When excessive hours are detected, they send detailed notifications to the concerned staff member, including information about remote working days, total hours worked and daily average hours. This monitoring system was implemented following the introduction of hybrid working arrangements. The HR department now tracks the duration each employee spends on official duties whilst working remotely. The financial daily has reviewed several such employee communications. These messages emphasised that prioritising health and work-life balance would benefit both personal well-being and professional success in the long term. Infosys employs approximately 323,500 staff members. Their workplace attendance directive, implemented on November 20, 2023, stipulates that staff must be present in the office for a minimum of 10 days monthly. Also Read | Not just Apple iPhones! Android smartphone makers like Samsung, Motorola step up exports from India to US; move due to Trump's tariff policies This programme from India's second-largest IT services provider emerges amidst concerns about young tech professionals facing health challenges, particularly cardiac issues, attributed to their irregular dietary and rest patterns. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like They Were So Beautiful Before; Now Look At Them; Number 10 Will Shock You Reportingly Undo "While we appreciate your commitment, we also believe that maintaining a healthy work-life balance is crucial for both your well-being and long-term professional success," says the HR communication. "We understand that work demands and deadlines can sometimes lead to longer hours. However, it is important to maintain the balanced work-life schedule to enhance productivity and overall happiness." The correspondence further adds, "Take regular breaks during your workday; Let your manager know if you are feeling overwhelmed or need support with reviewing priorities. Speak to your manager about delegating tasks or redistributing some responsibilities as appropriate; Take time to recharge during off hours, minimising work-related interactions whenever possible." In recent years, discussions surrounding occupational stress and its impact on workers' wellbeing have sparked widespread conversations about maintaining equilibrium between professional and personal life. This discourse has gained attention both nationally and internationally, as increasing instances of workplace-related pressure have resulted in various health complications, with some cases unfortunately leading to fatalities. Also Read | Tata Electronics builds India's 1st semiconductor fabrication unit: Gujarat enables 1,500 residential units; mainly for Tata Group staff, suppliers Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
&w=3840&q=100)
Business Standard
an hour ago
- Business Standard
Canada will scrap tax that prompted Trump to suspend trade talks
Canada's government announced on Sunday night that it would cancel a tax on American technology companies that led President Trump to suspend trade talks between the two countries, handing an important victory to Trump. Prime Minister Mark Carney discussed the decision to scrap Canada's digital services tax with Trump on Sunday, Carney's office said. In a sign that trade talks were resuming, Canada's finance minister, François-Philippe Champagne, spoke with the United States Trade Representative, Jamieson Greer, on Sunday, according to Carney's office. The tax, which had been due to take effect on Monday, became the latest flashpoint in difficult negotiations between the United States and Canada on Friday, when Trump said the talks were off. On social media, Trump called the levy a 'blatant attack' and said he would inform Canada within a week about the duties 'they will be paying to do business with the United States of America.' Forty-eight hours later, the Canadian government folded, announcing it would not go ahead with the tax. The finance ministry said the government had decided to 'rescind the Digital Services Tax in anticipation of a mutually beneficial comprehensive trade arrangement with the United States.' Technically, the cancellation of the tax needs to be approved in legislation, so until that time, the government is suspending its collection. Politically, canceling the tax should be a simple matter for the government. The White House did not immediately respond to a request for comment. Canada's 3 percent digital services tax has been in place since last year, but the first payments were only due beginning on Monday. Because the tax is retroactive, American companies were preparing to turn over roughly $2.7 billion to the Canadian government, according to a trade group for large American tech companies. US officials from both parties have long chafed at taxes like the one Canada has imposed, calling them unfairly targeted at services provided by American companies like Google, Apple and Amazon. Carney said that the cancellation of the tax would put the talks back on track with the goal of reaching an agreement on July 21. The Trump administration has imposed a 25 percent tariff on most goods from Canada, with which it has a free-trade agreement together with other countries, Canada is also subject to a 50 percent US tariff on its exports of steel and aluminum. Talks on reaching a new trade deal are particularly crucial for Canada, whose economy is heavily dependent on exports to the United States. Canada is America's second-largest trade partner. 'In our negotiations on a new economic and security relationship between Canada and the United States, Canada's new government will always be guided by the overall contribution of any possible agreement to the best interests of Canadian workers and businesses,' Carney said in a written statement.
&w=3840&q=100)
Business Standard
an hour ago
- Business Standard
Trump wants America to make iPhones. Here's how India is doing it
A new iPhone factory in an out-of-the-way corner of India looks like a spaceship from another planet. Foxconn, the Taiwanese company that assembles most of the world's iPhones for Apple, has landed amid the boulders and millet fields of Devanahalli. The sleek buildings rising on the 300-acre site, operational but still growing, are emerging evidence of an estimated $2.5 billion investment. This is what President Trump wants Apple to do in the United States. What is happening in this part of India shows both why that sounds attractive and why it will probably not happen. In India, Apple is doubling down on a bet it placed after the Covid-19 pandemic began and before Trump's re-election. Many countries, starting with the United States, were eager to reduce their reliance on factories in China. Apple, profoundly dependent on Chinese production, was quick to act. Analysts at Counterpoint Research calculated that India had succeeded in satisfying 18 percent of the global demand for iPhones by early this year, two years after Foxconn started making iPhones in India. By the end of 2025, with the Devanahalli plant fully online, Foxconn is expected to be assembling between 25 and 30 percent of iPhones in India. This newest factory is the largest of several making Apple products in India. Its full frame is still rising from red dust. Cranes are at work above the skeletons of high-rise dormitories for women workers. But about 8,000 people are already at work on two factory floors. Soon there should be 40,000. The effects on the region are transformative. It's a field day for job-seekers and landowners. And the kind of crazy-quilt supply chain of smaller industries that feeds Apple's factory towns in China is coalescing in India's heartland. Businesses are selling Foxconn the goods and services it needs to make iPhones, including tiny parts, assembly-line equipment and worker recruitment. Some of the firms are Indian; others are Taiwanese, South Korean or American. Some were already in the area, while others are setting up in India for the first time. The changes spurred by Foxconn are rippling broadly through Bengaluru, a city of eight million people that had a start in the 20th century as home to India's first aerospace centers. But its manufacturing base was pushed aside, first by call centers and then by flashier work in microchip design and outsourced professional services. Going back to the factory floor, as they're doing in Devanahalli, is what Trump wants American workers to do. To see the changes afoot here is to understand the allure of bringing back manufacturing. Wages are rising 10 to 15 percent around the Foxconn plant. Businesses are quietly making deals to supply Foxconn and Apple's other contractors. A factory that makes plastic parts for bank cash machines hosted a team from Foxconn for a tour. A foundry that makes yarn-spinning machinery was hoping it might start making the metal bits Foxconn might need in its new factory. Neither Foxconn nor Apple replied to requests for comment about their operations in India. India has been working toward a breakthrough like this for a long time. Its first prime minister, Jawaharlal Nehru, called hydroelectric dams, steel plants and research institutes the 'temples of modern India.' In 2015, Prime Minister Narendra Modi announced a 'Make in India' policy. Since 2020, his government has committed $26 billion to subsidizing strategic manufacturing goals. India's most urgent reason for developing industry is to create jobs. Unlike the United States, it does not have enough: not in services, manufacturing or anything else. Nearly half its workers are involved in farming. With India's population peaking, it needs about 10 million new jobs a year just to keep up. It also wants to achieve the kind of financial power and technological autonomy that China found as it became the factory to the world. One problem is that India's electronics factories still import the most valuable of the 1,000 components that go into a finished iPhone, like chips and camera modules. Skeptics disparage India's success with the final assembly of iPhones as 'screwdriver work,' complaining that too little of the devices' value is made in India. But the government, dangling subsidies, is persuading companies like Apple to source more of those parts locally. It is already getting casings, specialized glass and paints from Indian firms. Apple, which opened its first Indian stores two years ago, is required by the Indian government to source 30 percent of its products' value from India by 2028. Image Indo-MIM, an Indian company with an American-born boss, is the kind that contributes to the neighborhood forming around Apple's production and also benefits from it. At a plant near Devanahalli, in southern Karnataka State, Indo-MIM's engineers perform metal-injection molding for hundreds of companies around the world. It makes parts for airplanes, luxury goods, medical devices and more. The company is already making jigs or brackets for use in the Foxconn plant. In addition, a 'critical mass' of specialty firms means that Indo-MIM no longer needs to make many of the tools it uses to make its products, said Krishna Chivukula, its chief executive. 'You don't want to have to make everything yourself,' he said, adding it means Indo-MIM can concentrate on what it does best. Chivukula said the work force made Devanahalli fertile ground for factories. 'The people here are very hungry,' he said. 'They're looking for opportunity, and then on top of that millions of them are engineers.' Still, despite the surplus of engineers, companies are bringing in talent from East Asia. Prachir Singh, an analyst for Counterpoint, said it had taken 15 years to figure out what would work in China and five years to import this much of it to India. Centum is an Indian-origin contract manufacturer, like Foxconn is to Apple. Centum makes circuit boards that go into products like air-to-air missiles, forklifts and fertility scanners. Nikhil Mallavarapu, its executive director, said the company was in talks to customize testing equipment for the Foxconn factory. Newly hired engineers and other professionals are pouring into the area. Many moved hundreds of miles while others must commute hours a day to get to work. Some rise at 3:30 a.m. to make the 8 a.m. shift. But India is thick with people. A five-minute walk away, a village called Doddagollahalli looks the same as it did before Foxconn landed. Nearly all the houses clustered around a sacred grove belong to farming families growing millet, grapes and vegetables. Some villagers are renting rooms to Foxconn workers. Many more are trying to sell their land. But Sneha, who goes by a single name, has found a job on the Foxconn factory's day shift. She holds a master's degree in mathematics. She can walk home for lunch every day, a corporate lanyard swinging from her neck. It is people like Sneha, and the thousands of her new colleagues piling into her ancestral place, who make Foxconn's ambitions for India possible. Trump wants to revive the fortunes of left-behind American factory towns, but the pipeline of qualified young graduates is not there. Josh Foulger has recruited lots of motivated Indian workers like Sneha. He heads the electronics division of Zetwerk, an Indian contract manufacturer with factories in Devanahalli that sees itself as a smaller competitor to Foxconn. He said he routinely got 700 job applications a year from local tech schools. It is a matter of scale: Karnataka State alone, he pointed out, has a population half the size of Vietnam's. All of India's 'states are very keen on getting manufacturing,' said Foulger, who grew up in southern India and made his home in Texas before moving back to India, where he set up shop for Foxconn. India has jobs for engineers and managers and all the way down the ladder. 'Manufacturing does a very democratic job' of meeting the demand for good jobs, he said.
