The Hindu : Business : Deal with U.S. on social security tax unlikely

Online edition of India's National Newspaper
Friday, Jul 15, 2005

Business

Business

Deal with U.S. on social security tax unlikely

Sandeep Dikshit

NEW DELHI: Prospects of a social security tax avoidance pact for Indian IT professionals working in the U.S. during Prime Minister Manmohan Singh's forthcoming visit have hit a "big wall''. The U.S. is prepared to sign such agreements, called `totalisation agreements' only with countries that have matching social security practices. It does not view India's Provident Fund (PF) scheme as a comprehensive social security scheme and is unlikely to sign the pact, according to a senior industry official.

Despite five years of ineffectual lobbying with the Government, the industry has not given up hope. "We are requesting the Prime Minister and his team to do something in this regard,'' says the President of the National Association of Software and Service Companies (Nasscom), Kiran Karnik

In Europe, India has had some success with a couple of countries by proposing a variation. In Finland, for instance, the social security tax is refunded once the professional returns to India. Two more European countries have nearly agreed to sign a similar pact, he revealed.

The White House is the only institution in the U.S. that can persuade the social security administration to relax its laws for Indian IT professionals.

Printer friendly page
Send this article to Friends by E-Mail

Business