India has gained a three-year exemption of social security contributions for local workers who are temporarily in the UK and their employers under the Double Contribution Convention Agreement (DCCA).
India-UK Sign Agreement Alongside Free Trade Pact
India and the UK on Tuesday declared signing of this agreement as well as the free trade agreement.
The agreement will result in saving of approximately 20 per cent of salary, an official added, stating it is likely to benefit over 60,000 employees from IT sector alone.
The advantage to Indian companies and employees would be over Rs 4,000 crore. As per the ministry of commerce, the pact will render Indian service providers much more competitive in Britain.
Official Statement on DCCA Exemption
“In an unprecedented achievement, India has secured an exemption for Indian workers who are temporarily in the UK and their employers from paying social security contributions in the UK for a period of three years under the Double Contribution Convention,” it said.
Currently, Indian employees who work on a short stint in Britain make contributions to their social security pools, but are not in a position to obtain their benefits because they return when the projects get over.
Long-Standing Request of Indian Companies Fulfilled
This was a longstanding request of Indian companies operating within Britain to reduce the added expense burden of attracting skilled Indian experts on a temporary basis.
The mandatory National Insurance (NI) contributions of professional Indians working in the UK on temporary visas continue to be an extra cost burden of some 500 British pounds per staff member annually, above all other taxes and health surcharge remitted to the National Health Service (NHS), according to 2021 figures.
Existing Social Security Agreements of India
India has social security agreements with Belgium, Germany, Switzerland, France, Denmark, South Korea, and the Netherlands.
Therefore, Indians emigrating overseas for work need not contribute towards social security plans in such foreign nations. They and their companies may keep continuing social security schemes conducted by the Employees’ Provident Fund Organisation (EPFO) here in India while working overseas.
