US 1% Remittance Tax: What NRIs in the USA Pay When Sending Money to India, cash is taxed, bank transfers are not.

• Applies to the sender regardless of citizenship or immigration status, so it covers NRIs, green-card holders and US citizens alike.
• The remittance provider collects it at the point of sale; on a USD 1,000 cash transfer the tax is USD 10.
• Exempt: transfers funded by withdrawal from a US bank account, and those paid with a US-issued debit or credit card.
• IRS proposed regulations published in April 2026 set out the tax base and which physical instruments count.

• Send money from your US bank account (wire or app linked to the account) rather than paying cash at a counter.
• Keep transfer records: inward remittances are not taxable in India by themselves, but the money's source can matter in Indian scrutiny.
• Gifts to relatives in India are generally exempt in the recipient's hands under Section 56; gifts to non-relatives above INR 50,000 a year are taxable to the recipient.
• If you are resident in India for tax, US accounts and income also need to be reported in your Indian return.

Sources: Cherry Bekaert; Greenback Tax Services.

Last updated: 27 October 2026. US proposed regulations may change before they are finalised. Confirm against the official notification on incometax.gov.in before acting.