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Social Security Regime

Social Security Regime

In the recent past, the Indian social security regime, which includes the Provident Fund (PF) scheme and pension scheme has undergone a significant change, thereby impacting both domestic employees and international workers (i.e. expatriates working in India and Indian employees going overseas with which India has signed a Social Security Agreement). A focussed approach towards e-governance has been framed and is being implemented by the concerned authorities leading to administrative convenience for the employers. This can be evidenced by the introduction of a Universal Account Number to link the multiple IDs allotted to an individual, e-passbook to check the account balance, e-challan, etc. 

One of the significant changes introduced with effect from 1 September 2014 is an enhanced wage ceiling limit for contribution to PF and pension scheme from INR6,500 to INR15,000 per month. However, this limit is not applicable to international workers and they would continue to contribute to PF and pension schemes irrespective of the wage limit.

Our team provides tool-based services in respect of such social security matters.

Key service offerings: 

  • Analysis of the current employee compensation structure to evaluate the impact of social security on the employee and employer 
  • Advise and assist with various requirements under the social security regime 
  • Review the company’s policies with regard to expatriates’ assignments from a social security and tax perspective and suggest appropriate amendments, if required 
  • Advise on the withdrawal mechanism and related tax implications upon completion of assignment/retirement 
  • Advise and assistance in obtaining registration with Social Security Authorities in India 
  • Advise and assistance in obtaining a certificate of coverage from Social Security Authorities in India 
  • Advise on tax and foreign exchange implications in respect of the contributions made and the withdrawal of funds on completion of the assignment/retirement.

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