Trump’s New Tax Playbook: Reshaping US-India Financial Flows and Complicating Global Tax Planning

Mon Jun 09 2025

On May 22, 2025, President Donald Trump’s much-anticipated legislative package— “The One, Big, Beautiful Bill”—cleared a major hurdle by passing in the House of Representatives. This expansive bill is now headed to the Senate, where further debate and revisions await. While the package promises economic relief to American families and small businesses, its implications reach far beyond US borders.

From revised deductions for GILTI and FDII to a higher BEAT rate, this tax proposal aims to realign global tax and investment structures. Of particular concern to Indian businesses and individuals is the proposed 3.5% excise tax on outbound remittances—a policy that could significantly affect the $25 billion sent from the US to India annually.

At Simandhar Education, we’re not just training tomorrow’s finance leaders—we’re also helping them understand the shifting dynamics of global taxation and its real-world impact. Here’s a deep dive into what this bill means for Indian stakeholders with US interests.

1. What’s in the ‘One, Big, Beautiful Bill’?

The bill seeks to extend and expand the Tax Cuts and Jobs Act (TCJA) of 2017, while adding new reforms. Key provisions include:

GILTI deduction reduced from 50% to 49.2%
FDII deduction cut from 37.5% to 36.5%
BEAT tax increased slightly from 10% to 10.1%
Outbound remittance excise tax introduced at a reduced rate of 3.5% (initially proposed at 5%)
Permanent enhancement of Section 199A: Deduction raised from 20% to 23% for small businesses
Cap on SALT deduction increased to $40,000, phasing out above $500,000 income
Repeal of Pease limitation, allowing full itemised deductions post-2025
Replacement of MAGA accounts with Trump accounts

These measures aim to strengthen domestic economic growth while taking a firmer stance on international tax practices.

2. Impact on Indian Businesses & US-Based Indians

a. Excise Tax on Remittances: A New Financial Strain

If enacted, the 3.5% excise tax on outbound remittances will take effect from January 1, 2026, impacting:

Green card holders
H1B, L1, F1 visa holders
Any non-citizen remitting funds from the US to India

Who it hits hardest: Students, early-career professionals, and families supporting relatives in India may find this especially burdensome, as they won’t be able to claim tax credits on this excise.

This move could prompt a spike in remittance transfers in late 2025, as individuals rush to avoid the tax. Businesses with cross-border salary structures or service payments must also revise their cash flow planning.

b. Multinational Structuring: A Shift in Strategy

With reduced deductions for GILTI and FDII, and a higher BEAT rate, Indian MNCs operating in the USA will face increased effective tax rates on foreign income. This could lead to:

Revisiting entity structures
Adjustments in IP (intellectual property) ownership jurisdictions
Higher cost of global operations

c. SALT Cap and Itemised Deductions

High-income Indian professionals in the US may benefit from the higher SALT deduction and repeal of Pease limitation. However, these benefits may be offset by the new remittance tax and other global anti-avoidance rules.

Conclusion: Be Informed, Be Ready

The “One, Big, Beautiful Bill” is not just a domestic tax reform—it’s a global tax signal. Whether you're an Indian business with US operations, a student preparing to move abroad, or a working professional sending money home, this bill could change the way you manage finances and compliance.

As the Senate takes up this bill, individuals and corporations must begin proactive planning now. Staying ahead of the curve is not just smart—it’s necessary.

FAQs

1. When will the 3.5% excise tax on remittances be effective?

If the bill is enacted, the remittance tax will apply starting January 1, 2026.

2. Will taxpayers get credit for this remittance tax in India?

No, this excise tax is not eligible for foreign tax credit in India, making it an additional financial burden.

3. Who will be most affected by this bill?

Indian professionals and students in the US
Businesses sending money to India for services or support
Indian MNCs with US subsidiaries or operations

4. Is this bill final?

No, the bill has only passed the House. It still needs to clear the Senate, where significant revisions—especially to international tax provisions—are likely.

5. What should I do now if I plan to remit money to India from the US?

You should consider accelerating remittances before January 2026 and consult a tax advisor for structuring large transfers or investments.

Why Choose Simandhar Education for Your US Pathway?

At Simandhar Education, we’re more than a training platform—we are your strategic partner in navigating the world of international finance and accounting.

Real-time updates on global tax changes
Expert faculty with international CPA, CMA, and EA experience
Placement support with Big 4 and Fortune 500 companies
Pathway programs in partnership with top US universities
Support for Visa, Evaluation, and Licensing through every step

Whether you’re aiming for a US CPA, US CMA, EA or exploring STEM Master’s programs in Accounting, Simandhar ensures you’re prepared—not just to pass exams, but to lead in a global business landscape.

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