Reply #42: Pertains to Outsourcing/H1B's [View All]

[OhioChick]

India plans social security pact with US
November 18, 2006 12:15 IST

Overseas Indian Affairs Minister Vayalar Ravi said in New York on Friday that New Delhi is trying to negotiate for an agreement with the Bush Administration under which temporary Indian workers in the US would not have to pay social security taxes.

Talking to a small group of Indian journalists Ravi said during the visit of Belgium prime minister Guy Verhofstadt to India earlier this month an agreement, called social security agreement, was signed with Belgian Foreign Minister under which Indians who would work there for less than five years would have the option of paying their social security taxes in India rather than in Belgium.

'We are also negotiating with the United States for a similar kind of agreement,' Ravi said in response to a question. He said such agreements would also be signed with other European Union countries as well following conclusion of negotiations.

For hundreds of thousands of Indian H1B workers in the US, the mandatory payment of social security tax has been an issue since workers who go back to India after six years of temporary employment in the US either voluntarily or due to lack of sponsorship for permanent residency cannot claim the money they had paid from their earnings. For the permanent residents and citizens, social security acts something like a social insurance program at old age.

http://www.rediff.com/money/2006/nov/18india.htm