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Hindustan Times
04-07-2025
- Business
- Hindustan Times
How Trump's ‘Big Beautiful Bill' affects Indians: From sending money to making investments, and crossing borders
After the US Congress cleared President Donald Trump's massive legislation about government spending, focus is now on its impact not only in the US but on the world. For India, one of the most visible and direct impacts will be on remittances, that is, the money sent to or invested in India by NRIs. Migration is also in focus. US President Donald Trump with Indian Prime Minister Narendra Modi at the White House in Washington earlier this year.(Reuters/File) Since the 900-page details of what Trump has named 'One Big Beautiful Bill' are now in, let's break down the immediate impact on Indians. Charges on sending money home The originally proposed 5 per cent tax on remittances sent from US to foreign countries was slashed to just 1 per cent in the final draft, which has now passed. There are about 4.5 million or 45 lakh Indian citizens or persons of Indian origin in the US, many of them big earners for families back in India. 'US bank and card-based remittances remain exempt, but NRIs who make high-value or recurrent transfers may need to reconsider their financial plans,' Ram Naik, co-founder and director, The Guardians Real Estate Advisory, told HT. This comes into affect from January 1, 2026. Tax on foreign income While the bill deals with a humungous number of things – some of which even led to fights between Trump and his ex-BFF Elon Musk – there are no changes to the existing rules on foreign-source rental income earned by US residents, including NRIs holding a green card or US citizenship. 'Such income will continue to be taxed under current law,' says Sandeep Bhalla, Partner, Dhruva Advisors, a tax and regulatory advisory services firm. This means tax paid in India can be claimed as tax credit in the US, as before, to avoid double taxation on the same income. Border crackdown Immigrants from India, especially undocumented border-crossers and those who take the 'donkey route', are not immune to the crackdown proposed in Trump's bill. It gives about billions of additional funds towards immigration-control and national security efforts, in line with Trump's pledge to carry out the 'largest mass deportation operation in American history.' The US is reported to have identified about 18,000 Indian nationals who entered illegally. The Indian government has said it would take back these people and break the "human trafficking ecosystem". Unauthorised immigrants make up 3% of the US population, as per research cited by the BBC. The number of Indians among them is contested, however: estimates vary from 2.2 lakh as per US government data, to 7 lakh as per the Pew Research Center, making them the third-largest group after Mexico and El Salvador. Yet Indians make up only a small share of the overall unauthorised migrant population in the US. A 2025 Johns Hopkins University research paper essentially says illegal Indian population in the US grew in numbers and as a percentage of total unauthorised migrants: from 0.8% in 1990 to 3.9% in 2015, before dropping to 2% in 2022 as per latest data available. Fees for applications Trump's bill raises the costs for those trying to stay in the US legally too. Bloomberg reported that the bill increases the fees for work permits, asylum applications and other humanitarian protections. Cuts to Medicaid and other government safety-net programmes will also impact immigrants and low-income groups. Fees include a minimum $100 to apply for asylum, $550 for employee authorisation applications, $500 for Temporary Protected Status and $1,000 for humanitarian parole. There is to be a fine of $5,000 for anyone caught crossing the border between ports of entry. There are to be no fee waivers for low-income applicants either. These appear to be some of the immediate impacts, while medium- and long-term effects in Indians and the Indian economy remain to pan out.
Hindustan Times
26-06-2025
- Business
- Hindustan Times
To rent or sell property? Here's what you should know to make the right decision
Rajiv Sharma, a 38-year-old IT consultant in Chennai, owns a 2BHK flat in Velachery. He's torn between selling the flat for ₹ 85 lakh or renting it out for ₹ 22,000 per month. The flat is fully paid off, and he currently lives in Bengaluru for work. While renting would give him a steady second income, he worries about tenant issues and maintenance from afar. On the other hand, selling now could help him invest in a new property near Bengaluru, but he's unsure if property values in Chennai might rise further. Rent versus buy: Renting a property is typically more viable in mature, saturated markets, while selling is often better suited to early-stage growth areas. (Picture for representational purposes only)(Unsplash) In India's Tier 1 cities, net rental yields typically range from 2–3%, while capital appreciation in developing areas has averaged 6–8% annually over the past five years. Rental income offers steady cash flow, while selling can deliver higher one-time returns in fast-growing zones like Navi Mumbai or emerging micro-markets in Bengaluru. 'However, if the area has already seen significant appreciation, rental income may be the more viable short- to medium-term strategy with relatively lower ongoing costs. Ultimately, the decision depends on market maturity as renting tends to be more attractive in saturated markets, while selling is often better suited for early-stage growth corridors,' says Ram Naik, co-founder and director, The Guardians Real Estate Advisory. If Sharma decides to rent his apartment out, he can earn ₹ 22,000 per month, which adds up to ₹ 2.64 lakh annually. This gives him a rental yield of approximately 3.1 per cent, which is modest but typical for residential properties in Indian metro cities. The rental income would be taxable, but he can claim standard deductions for property tax and maintenance. If he chooses to sell the flat, he could receive ₹ 85 lakh as the sale price. Assuming he bought the flat 8 years ago for ₹ 55 lakh, his indexed cost of acquisition would be about ₹ 75.3 lakh. This results in a long-term capital gain of ₹ 9.7 lakh. At 20 per cent long-term capital gains tax, he would pay roughly ₹ 1.94 lakh in tax, leaving him with net proceeds of around ₹ 83.06 lakh. This lump sum could be reinvested in financial instruments or a new property, depending on his long-term goals. Caught between renting and selling? Here's how to decide 'In stable markets, renting can ensure consistent income over the medium term. However, if new infrastructure (e.g., metro extensions, business districts) is likely to drive strong capital appreciation, resale value may outpace cumulative rental income. Assessing both upside scenarios, renting and resale, is crucial,' says Sudhanshu Mishra, Principal Partner, Square Yards. Also Read: Planning to buy a ₹ 2 crore home? A large down payment can ease your EMI burden and reduce financial stress For example, infrastructure-led development, such as metro and expressway projects, has driven price growth in cities like Pune and Hyderabad, where values have appreciated by 7–10% annually. In such locations, resale gains over 5–10 years often outpace cumulative rental income. 'However, in more stable or supply-saturated markets like South Mumbai, rental income over the same period may offer greater predictability. With tax benefits and depreciation factored in, long-term renting can deliver reliable cash flow when capital appreciation prospects appear limited,' says Naik. However, there are other aspects that need to be considered too. Prolonged vacancies and unexpected repairs, often costing ₹ 1– ₹ 1.5 lakh annually, can erode rental profitability. In areas with weak demand or limited public infrastructure, properties may remain vacant for extended periods, reducing effective rental yields. 'For investors lacking professional property management support, selling in a favourable market may be the more prudent decision,' says Naik. Given the relatively modest rental yields of 2–3%, selling the property and reinvesting the proceeds can potentially offer stronger long-term growth, unless rental demand remains robust and consistent. Ultimately, the choice depends on the individual's risk profile and financial goals: capital appreciation versus steady income and asset preservation. 'Owners should weigh the income stability of renting against potential capital gains, considering local market dynamics, such as proximity to commercial hubs where both rents and resale values tend to be higher, to make an informed decision aligned with their investment strategy,' says Mishra. Anagh Pal is a personal finance expert who writes on real estate, tax, insurance, mutual funds and other topics
Hindustan Times
31-05-2025
- Business
- Hindustan Times
Homebuyers' guide: What you need to know about arbitrary payment clauses in builder agreements
In 2022, Ramesh Mehta booked an under-construction apartment in Pune. His builder-buyer agreement stated that each instalment would be due on 'completion of the corresponding construction milestone or 60 days from the date of booking, whichever is earlier.' The second instalment was tied to the completion of the first-floor slab. However, the builder demanded payment just 60 days after booking, even though the slab work hadn't started. Since the clause allowed it, Mehta was forced to pay despite no visible progress. Later, construction stalled for months, leaving him financially strained with no assurance of timely possession. This example highlights the importance of thoroughly understanding all aspects of the purchase, especially when buying property in India. Go through the timeline of payments to the builder as mentioned in the agreement. The 'whichever is earlier' clause typically links payments to either the achievement of a construction milestone or a pre-decided calendar date—whichever occurs first. 'If the date arrives before the milestone is achieved, the buyer is still obligated to pay, even if the project is delayed. This can place an undue financial burden on the buyer,' says Jayesh Rathod, co-founder and director, The Guardians Real Estate Advisory. In property sales agreements, the clause of 'whichever is earlier' usually pertains to payment deadlines of a fixed period, such as three months, or an event which involves loan disbursement, approvals, or when the seller has met their obligations. 'If this event takes place ahead of the fixed period, the buyer will be required to make an immediate payment and not doing so may result in forfeiting of the amount paid in advance, or the agreement is terminated,' says Santhosh Kumar, vice chairman, ANAROCK Group. Although developers often support their demand notices with progress photographs and certifications from project engineers or architects, it is critical that the sale agreement explicitly requires that such demand notices be substantiated with certified proof of milestone achievement. 'From a buyer's standpoint, aligning payment schedules with actual project development helps avoid premature cash outflows, prevents EMI burdens on under-construction loans, and provides greater financial flexibility,' says Shubhi Jain, principal partner and head of CRM, Square Yards. 'You may receive a notice of payment default and not actioning it may result in penalties, interest being levied, or even the booking cancelled,' says Kumar. 'Much depends on how clearly the milestones are mentioned in the agreement. If they are ambiguous or misleading, you may be able to find recourse with Real Estate (Regulation and Development) RERA or consumer forums,' says Kumar. Under RERA, buyers in India have a legal right to negotiate their payment terms. The law promotes payment plan systems that are construction-linked rather than linked to arbitrary dates. 'To get this right financially, the payment should be linked to the completion of the verified stages of construction—slab completion, internal finishing, or any such step that can be financially measured. Whenever any request is presented forthwith to the developer, he does entertain the request. It would indeed be advisable to get legal advice during the drafting of the agreement and ensure that the schedule of payments is drafted in your favour,' says Rathod. 'It is advisable to negotiate for payment triggers that are linked to specific, tangible milestones, such as completion of certain floors, receipt of the Completion Certificate (CC), or formal application for the Occupancy Certificate (OC),' agrees Kumar. Also Read: Donald Trump's 5% tax on remittances: Should NRIs fast-track real estate investments back home? A payment clause that is flexible and based on milestones thus reduces the risk of premature payments. Anagh Pal is a personal finance expert who writes on real estate, tax, insurance, mutual funds and other topics
