Milpitas(California) — Satnam Singh Chahal, Executive Director of the North American Punjabi Association (NAPA), has issued a strong appeal to the Government of United States to immediately withdraw the 5% Tax Collected at Source (TCS) on remittances sent by Non-Resident Indians (NRIs) to India, especially those meant to support aging parents and dependent family members.
Chahal described the 5% TCS under the Liberalised Remittance Scheme (LRS) as “unjust, unnecessary, and inhumane,” emphasising that the majority of NRIs remit money not for investment or luxury spending, but to fulfil their moral and cultural duty of supporting elderly parents back home.
“This tax is not just a financial burden — it is an emotional blow to families who are already separated by thousands of miles and rely on remittances as a lifeline for basic needs like food, healthcare, and medication,” said Chahal.
NAPA, a leading advocacy group representing Punjabi and broader Indian diaspora interests in NAPA, argues that the current policy paints all remitters with the same brush, failing to differentiate between discretionary overseas spending and essential family support.
“By taxing remittances meant for elderly care, the government is penalizing compassion,” Chahal said. “We urge the President Trump to exempt family maintenance-related remittances from this rule immediately.”
Chahal further pointed out that while the TCS may be adjustable against Indian income tax liability, most NRIs who remit money to India do not file tax returns in India, rendering this provision irrelevant and creating needless administrative complexity. “It is completely unfair to expect NRIs to navigate the Indian tax system just to reclaim money that should never have been deducted in the first place,” he added.
NAPA calls on US policymakers to engage with US organizations and introduce reforms that reflect the real-world impact of such regulations. Chahal said the government must honor the contribution of the global Indian community, which sends over $100 billion in remittances annually, by ensuring that policies are both fair and humane.“We are not asking for favors — we are asking for fairness,” Chahal concluded. “This 5% tax is a burden on love, duty, and responsibility. It must go.”