Exempt techies from social security taxes, India tells US

Our Bureau New Delhi | Updated on March 12, 2018 Published on July 19, 2011

Ms Hillary Clinton, US Secretary of State, with the External Affairs Minister, Mr S.M. Krishna, during a joint press conference after the delegation level talks at Hyderabad House in the Capital on Tuesday. -- 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.

Published on July 19, 2011
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