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Remittance
A proposed 5 per cent US tax on remittances sent abroad by non-citizens is raising alarm in India as it may hit Indian households and the rupee, economic think tank GTRI said on Sunday. The provision is part of a broader legislative package titled 'The One Big Beautiful Bill' introduced in the US House of Representatives on May 12. It targets international money transfers made by non-US citizens, including green card holders and temporary visa workers like those on H-1B or H-2A visas. The proposed levy will not be applicable to US citizens. "The proposed US tax on remittances sent abroad by non-citizens is raising alarm in India, which stands to lose billions in annual foreign currency inflows if the plan becomes law," the Global Trade Research Initiative (GTRI) said. For India, the stakes are high as the country received USD 120 billion in remittances in 2023-24, with nearly 28 per cent originating from the US, it added. "A 5 per cent tax could significantly raise the cost of sen
The finance ministry on Thursday said expenses incurred by an employee on a business visit, when such expenses are borne by the employer, will not be covered under RBI's liberalised remittance scheme. A clarification to this effect was provided in a set of FAQs issued by the finance ministry on the LRS (Liberalised Remittance Scheme). "When an employee is being deputed by an entity for any of the above (business visit), and the expenses are borne by the latter, such expenses shall be treated as residual current account transactions outside LRS and may be permitted by the AD (authorised dealer) without any limit, subject to verifying the bona fide of the transaction," the ministry said. Under the LRS, an individual is permitted to remit overseas up to USD 2.5 lakh annually. Any remittance by an individual above this threshold would require RBI approval. The ministry on May 16 notified the Foreign Exchange Management (Current Account Transactions) (Amendment) Rules, 2023 to include .