India Us Totalization Agreement 2019
In March 2019, India and the United States signed a Totalization Agreement that seeks to improve the social security provisions for the citizens of both countries. This agreement is a significant achievement for both nations and will have a far-reaching impact on the lives of citizens who work or have worked in either country.
So, what is a Totalization Agreement?
Totalization Agreements are bilateral agreements between countries that ensure that citizens who work in both countries are not subjected to dual social security taxation. These agreements protect the rights of these citizens to receive social security benefits and avoid the complications that arise from having to deal with two different social security systems.
The India-US Totalization Agreement was long-awaited and is a significant step forward in improving the social security provisions for Indian and US citizens. India and the US are two of the largest economies in the world, and many citizens work in both countries, making this agreement an essential step towards the promotion of social security.
The agreement is particularly beneficial for Indian professionals who frequently work in the US under the H-1B visa program. These professionals are required to make contributions to the US social security system but are ineligible to receive benefits unless they accumulate a certain number of credits under the system. The Totalization Agreement helps solve this problem by providing a mechanism that allows these professionals to accumulate the required credits, even if they have not worked in the US for the required period. This will also help employers save on the added costs associated with dual taxation.
The India-US Totalization Agreement is also beneficial for US citizens who have worked in India. Previously, US citizens who had worked in India had to make contributions to both the Indian and US social security systems, making it expensive and repetitive. The Totalization Agreement ensures that these US citizens are only liable to pay social security taxes in one country, providing significant relief.
In summary, the India-US Totalization Agreement is a significant achievement that has the potential to improve the lives of millions of citizens who work or have worked in either country. It’s an excellent example of how bilateral agreements can help promote social security and streamline the administration of social security systems on a global scale. The agreement also helps foster the friendly relationship between the two countries and opens opportunities for further cooperation in various sectors.
