A new US excise taxes certain money transfers sent abroad. Here is what the law does, who it hits, the exemptions, and a calculator to estimate the tax on your remittance.
What is the US remittance tax?
Under 2025 US legislation, certain money transfers sent from the United States to other countries — including India — became subject to a new remittance excise tax. Early drafts of the bill proposed rates as high as 5%, later trimmed to 3.5%; the version finally enacted set the rate at 1% on covered remittance transfers. Because this is new law with regulatory guidance still settling, the figures here are as of June 2026 and you should verify the current rate, effective date and exemptions before relying on them.
How the tax is calculated
The estimate is simply the transfer amount multiplied by the applicable rate:
Remittance tax = Amount sent × rate%
At the enacted 1%, a $10,000 transfer carries a $100 remittance tax, leaving $9,900 before the provider's own fees and exchange-rate spread. The calculator above lets you set the rate yourself, so it stays correct if the rate changes — just enter the rate in force on your transfer date.
Worked examples at the enacted 1% rate
Illustrative, at the 1% enacted rate as of June 2026. The transfer provider's fee and FX spread are separate and often larger than the tax — compare them in our send-money guide.
Who it hits — and who may be exempt
The tax is built around remittance transfers made through remittance-transfer providers — broadly, individuals sending money abroad. The legislation carries exclusions, notably for transfers funded from US financial-institution accounts and for senders verified as US citizens or nationals, with the provider generally responsible for collecting any tax due. The precise boundaries are being fixed by regulations, so treat exemptions as something to confirm with a US tax professional rather than assume. This page and calculator are an educational estimator, not a determination of your liability.
What actually costs you more: tax or FX?
For most NRIs, a 1% excise is smaller than the combined transfer fee plus exchange-rate margin a provider charges — a poor FX rate on a large transfer can quietly cost several times the tax. So the real money-saving move is choosing the cheapest reliable route, which we break down in send money to India. Once the money arrives, where it sits and how it is taxed in India is covered in our NRE vs NRO guide and NRI tax slab guide.
Frequently Asked Questions
Is there a US tax on money sent to India?
A US remittance excise tax was introduced under 2025 legislation, applying to certain outbound money transfers sent from the United States. The headline rate that was finally enacted is 1% on covered remittance transfers — much lower than the figures floated in early drafts. As this is recent law with evolving guidance, you must verify the current rate, effective date and exemptions with an official source or a US tax professional before relying on it.
How much is the US remittance tax rate?
The enacted rate is 1% on covered remittance transfers (early versions of the bill proposed higher figures such as 5% and 3.5%, which were reduced before passage). Because the rule is new and subject to regulatory guidance, the calculator above lets you set the rate yourself — enter whatever rate applies on your transfer date, as of June 2026.
Who has to pay the US remittance tax?
The tax is structured to apply to remittance transfers made through remittance-transfer providers — broadly, money sent abroad by individuals. Transfers funded from certain US accounts or made by verified US citizens may be excluded under the final rules, and the provider generally collects the tax. Exactly who is caught and who is exempt depends on the final regulations — confirm your specific situation with a tax adviser.
Are bank wires and US citizens exempt from the remittance tax?
The legislation includes exclusions — notably for transfers funded from US financial-institution accounts and for senders who are verified US citizens or nationals, depending on how the provider handles verification. The precise scope is being settled by regulations, so treat any exemption as something to confirm, not assume. The calculator here is a generic estimator, not a determination of liability.
Does the remittance tax apply to money I send to my own NRE/NRO account?
The tax is on the act of remitting from the US, not on which Indian account receives it — so in principle it can apply to transfers to your own NRE or NRO account, subject to the funding-source and sender exemptions. Where the money lands (and how it is taxed in India) is a separate question covered in our NRE vs NRO and NRI tax slab guides. Verify the current US rule before sending large amounts.
How do I reduce the impact of the US remittance tax?
Practical levers, subject to the final rules: send through a method or funding source that qualifies for an exclusion, consolidate transfers to reduce per-transfer friction, and time transfers around exchange-rate movements (which often dwarf a 1% tax). Compare transfer methods and total cost in our send-money-to-India guide — the fee and FX spread frequently matter more than the excise itself.
Estimates are for information and education only — not financial, tax or investment advice. Verify current rates and rules with official sources.