Us India Social Security Totalization Agreement

The Indian industry in the United States pays about $1 billion for Social Security, which can only be redeemed after 10 years. With a temporary highly qualified visa holder`s lifespan of three to six years, most workers are unable to obtain benefits, the Confederation of Indian Industry (CII) and the United States India Business Council (USIBC) said Tuesday in a new report. « The United States believes that due to the incompatibility of the two social security systems, the totalization agreement may not be plausible in the current context, » says the joint CII-USIBC report, which recommends an analysis of the feasibility and prospects of an agreement. According to industry estimates, Indian companies, mainly in the information technology sector, lose up to $4 billion a year in U.S. Social Security, which is never reimbursed. As a general rule, individuals should only take action on totalization benefits under an agreement when they are willing to apply for a pension, survival or disability. A person wishing to introduce a entitlement to benefits as part of a totalization agreement can do so with any social security agency in the United States or abroad. The goal of all U.S. totalization agreements is to eliminate dual social security and taxation, while maintaining coverage for as many workers as possible under the country where they are likely to have the most ties, both at work and after retirement. Any agreement aims to achieve this objective through a series of objective rules. « India is in favour of discussions due to the introduction of new social security systems in the country in recent years and the expansion of coverage, which has led to greater compatibility of the two countries` systems, » a development official told BusinessLine. According to Richa Mohanty Rao, partner of the law firm Cyril Amarand Mangaldas, SSAs are akin to double taxation agreements in which workers in the signatory states are not subject to the social security laws of the host state when they contribute in their country of origin.

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