SEARCH

Exempt techies from social security taxes, India tells US

Our Bureau
Share  ·   Comment (11)   ·   print   ·  
Strengthening ties: The External Affairs Minister, Mr S.M.
Krishna, and the US Secretary of State, Ms Hillary Clinton, at
a joint press conference after the delegation-level talks in the
Capital on Tuesday. — Photo: Ramesh Sharma
Business Line Strengthening ties: The External Affairs Minister, Mr S.M. Krishna, and the US Secretary of State, Ms Hillary Clinton, at a joint press conference after the delegation-level talks in the Capital on Tuesday. — Photo: Ramesh Sharma

India has once again urged the US to exempt information technology professionals, who go on short-term work visits, from paying social security taxes — an exemption that, if granted, could result in savings of at least a billion dollars for the country's software industry.

Cumulatively, Indian IT professionals on H-1B or L1 visas (staying there for up to six years) pay over $1 billion annually to the US Government in the form of social security taxes, with no benefit or prospect of refund as the social security safety net does not kick-in for ten years. In fact, this issue has been a persistent irritant between the two countries. “India has requested the US to consider a Totalisation Agreement with India,” the External Affairs Minister, Mr S.M. Krishna, said at a joint press conference with the visiting US Secretary of State, Ms Hillary Clinton.

Mr Krishna said India has also conveyed to the US the concerns of IT companies in sending their professionals to execute projects and conduct business in the US. At the meeting with Ms Clinton, Mr Krishna also highlighted that Indian IT companies are contributing to the US economy through investments, employment and supporting US competitiveness.

Bilateral Treaty Talks 

India and the US have also agreed to resume negotiations on a bilateral investment treaty, Mr Krishna said. In many ways, the resumption of talks is an acknowledgement of the enormous potential for further expansion in trade and investment flows in both directions. 

 He also announced that India and the US have increased their engagement in the area of cyber security. “We are pleased with the MoU for cooperation between the Indian Computer Emergency Response Team (CERT-In) and the US CERT,” Mr Krishna said.

(This article was published on July 19, 2011)
XThese are links to The Hindu Business Line suggested by Outbrain, which may or may not be relevant to the other content on this page. You can read Outbrain's privacy and cookie policy here.

Comments:

Better yet, end the H-1B and all the other visas, when American unemployment is so high. Problem solved.

from:  Bart
Posted on: Jul 20, 2011 at 01:14 IST

The US is not responsible to provide Indians with jobs. The visa program was intended to fill temporary gaps but now India is quite certain the US should be furnishing them with employment.

from:  ctrlaltdel
Posted on: Jul 20, 2011 at 02:09 IST

If they end these visa programs, they can hire Americans and still get the social security money. That's the best solution for America.

from:  P Henry
Posted on: Jul 20, 2011 at 18:29 IST

US is looking for increased revenue now, not schemes that lower revenue. The Indians should just look at this as the cost of all the business they are doing here. How about this: ban offshore software development....I have worked at Morgan Stanley in NYC where the dept head was an Indian woman, and 50% of her staff were Indians....Corporations love it cause they work for CHEAP, even considering the lower quality of much of their work, to say nothing of their communication skills. I am working for a client in LA now...and its the same story....hordes of Indians displacing Americans in skilled jobs....

from:  Software veteran
Posted on: Jul 20, 2011 at 20:54 IST

What? You mean that Americans that have made possible the dynamic environment that hosts Indian workers should not receive even a token of appreciation from H1-B workers who are benefiting from that environment - especially now, at a time when American Social Security is threatened? I don't get this action, and I'm very disappointed in the Obama Administration if this passes. As it is, many Americans are losing jobs to H-1B visa holders. This does not seem fair.

from:  phil
Posted on: Jul 20, 2011 at 21:24 IST

Make the Indians pay more for the privilege to work with the visa. Let them pay for our social security. Curry flavor this.

from:  Disgruntled
Posted on: Jul 20, 2011 at 21:48 IST

Many US workers pay into SS system and will never collect anything. It's just another tax, if Indian workers don't have to pay that tax then this will make them artificially more competitive then the US workers as they will be able to accept roughly a 12% smaller paycheck and still earn the same exact money as the US worker.

from:  Boris
Posted on: Jul 20, 2011 at 23:07 IST

It is not fair to give Indian workers an even greater competitive advantage on our own American soil. They will be exempt from a tax that Americans must pay, not to mention Indian workers are statistically being paid less than market wages on average. This is simply an attempt by Indian companies to lower the cost of business in the United States and lower their payroll tax. Really the only fair solution is to halt the H-1b and other corporate sponsored immigration programs. If you want workers in America, hire Americans. You don't see American companies importing millions of foreign workers into India do you? What if we decided that it was cheaper to staff our Indian offices with Pakistani workers? Indians would be rioting. 90% of the workers at Infosys, Wipro, and Tata currently in the United states are Indian nationals. These companies come to our country and discriminate against our people. That is audacity at its finest. Be good guests, or get the hell out India Inc.

from:  R. Lawson
Posted on: Jul 20, 2011 at 23:11 IST

The US is really stupid. They are not happy saying they don't have enough engineers, chinese people send their brighest to the US to get educated in science and they bring all that knowledge back in China, laughing all the way, and Hillary Clinton is show all US people working in computer science they are too expensive. The backlash, Ms Clinton, is going to hit you so hard on the face it's going to be funny. The US is on the slope of recession and China is massively investing in science and engineers, while you are sacrificing all your CS and science people and keeping they unemployed, meanwhile China and India are gonna tear you all a new hole.

from:  Alice
Posted on: Jul 21, 2011 at 00:50 IST

These programs have Immigrant potential, What do you do if they decide to immigrate? What about the lost taxes?

from:  dan
Posted on: Jul 21, 2011 at 02:46 IST

I understand the concerns about who ever commented about h1b workers. I bet US. Cannot replace H1b workers and fill the positions with Americans , it is not about cost it is about finding talent. I myself have tried getting American programmers to fill positions for my company ...hard to find man !! The only solution is make education cheap and graduate very American.

from:  Ram
Posted on: Jul 21, 2011 at 17:26 IST
This article is closed for comments.
Please Email the Editor

DATA BANK

Exchange Rate

Dollar Spot Forward Rate

Open-Ended Mutual Funds

MCX-SX Currency Futures

NSE Currency Futures


O
P
E
N

close

Recent Article in Industry

TRAI has suggested that Adjusted Gross Revenue should be calculated excluding service tax, entertainment tax and sales Tax or VAT paid to the Government from the gross revenues.

New DTH regime: TRAI for tighter cross-holding norms

Regulator for allowing presence on DTH or cable; longer licence period »

Comments to: web.businessline@thehindu.co.in. Copyright © 2014, The Hindu Business Line.