Here’s how ‘totalisation of social security’ can benefit Indian professionals in the US

• A long pending demand of India for totalisation of social security agreement — for the Indian diaspora in the US — may see light.
  
• That means, an Indian professional in the US who has been paying taxes from the very first day of the job will be able to claim the money spent on social security there after coming back to India — in case the visa is not renewed or he leaves the job.
  
• Presently, the US has agreements with almost 24 countries including South Korea and Japan.

The long pending demand of India for totalisation of social security agreement — for the Indian diaspora in the US — may now see light. During Donald Trump’s two-day visit to India, Prime Minister Narendra Modi sought that the two sides must take forward the process of totalisation — which combines social security laws of the two countries. The move, if implemented, will benefit the many Indians working in the United States.

According to Mohit Singla, the Chairman of Trade Promotion Council for India (TPCI), this international social security pact eliminates dual taxation — that is both in the native country and where the employee works.

The agreement will come as a relief to Indian-origin professionals and H1-B visa holders, who pay an enormous amount of taxes in the US, adding up over a billion dollars to the US social security. The deal would spare these professionals from taxes on their income, owing to social security — if they go for a shorter period of time.

That means, an Indian professional in the US who has been paying taxes from the very first day of the job will be able to claim the money spent on social security there after coming back to India — in case the visa is not renewed or he leaves the job. As of now they have no claim because the minimum period is a minimum of 10 years.

This social security contribution stays with the Social Security department of the US. “Once it is signed, the agreement would benefit workers of both the countries and ensure equality of treatment,” Singla said.

Addressing the US-India trade relations, Finance Minister Nirmala Sitharaman had said that the totalisation agreement with the US has always been on the cards. "One of the reasons why that was never responded to was that India did not have a social welfare net or social insurance cover for Indians in India. And therefore, if they had to give it, they wouldn't be given in the sense where would it be used?" Sitharaman told PTI.

"It's so designed that you really can't benefit. And no one in any case does live for that duration in this country," she had said after the meeting with US Treasury Secretary Steven Mnuchin.

Presently, the US has agreements with almost 24 countries including South Korea and Japan.

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