Mumbai at a Glance
Expat Info Mumbai: Social Security & More
iStockphotoLearning local business etiquette helps you get along with your new colleagues.
Dos and Don’ts
Concerning punctuality, don’t be surprised if you are kept waiting or if business meetings are rescheduled at short notice. Within reason, this doesn’t necessarily constitute a sign of disrespect or low priority. Similarly, don’t be offended if your guests are not on time. In fact, when invited to a private function, make sure to turn up just a tad late yourself.
As in most places, business attire in Mumbai depends largely on the branch or industry you are working in. To be on the safe side, men should always wear a suit and tie. Considering the often excessive heat, it is acceptable to remove your jacket. Women wear formal dresses or pant suits, with legs, shoulders and upper arms covered. Some expats may switch to Indian-style clothing after a while as it is better suited for the climate. But do make sure to check if this is in line with the company dress code!
Taxation
Foreign nationals with a permanent resident status in Mumbai are subject to Indian taxation laws. They are expected to pay income tax on their earnings, calculated at a rate of 0, 10, or 20% for incomes below 180,000, 500,000, or 800,000 Rs respectively. Women can earn up to 190,000 Rs annually tax free. All incomes above 800,000 Rs a year are taxed at a rate of 30 %.
Expats who spend fewer than 183 days in one financial year in India and who receive their salary from non-Indian sources may be eligible for tax relief if they continue to pay tax in their home country or their usual country of fiscal residence.
Tax relief can be granted under a formal Double Taxation Avoidance Agreement (DTAA) between India and the country concerned. It can also be negotiated on an individual basis if no such agreement exists. To find out whether your country has a DTAA with India, consult your national financial authorities or visit the Income Tax Department website of the Indian Ministry of Finance.
Social Security
With about 370 million people having no pension plan whatsoever, India’s social security system is still very rudimentary. The two government schemes for old-age pensions and other benefits, the Employees’ Provident Fund Organization and the Employees’ State Insurance Corporation, only include employees in the small “organized” sector.
However, even for these comparatively few cases, proper enforcement strategies are not in place, due to a lack of government infrastructure. The ESIC, responsible for medical, sickness, maternity and disability benefits, faces similar problems despite recent extensions of the membership criteria to cover wider parts of the working population.
Social Security Agreements
Expats in Mumbai who are employed by an Indian company are likely to qualify for EPFO and ESIC coverage and are thus liable to pay social security contributions. Unfortunately, there are not many social security agreements between India and other countries. Consult the Emigration Services website of the Ministry of Overseas Indian Affairs to find out precisely which countries are contained within the framework of an agreement.
The gist of the social security agreements is for expats whose work assignment in Mumbai does not exceed 60 months. They may choose to continue their social security contributions in their home country instead, and all payments made to one system or the other count towards calculating the employee’s benefits. It is also recommended for expatriates to contribute to a private pension plan during their time in Mumbai.
Healthcare
Mumbai offers good access to hospitals and healthcare facilities for those who can afford it. Expats are strongly recommended to take out comprehensive health insurance with an international provider before coming to India. Public hospitals are often understaffed and underequipped, so most expats in Mumbai seek medical assistance from private doctors or hospitals.
There are roughly 70 municipal hospitals in Mumbai and over 90 private clinics with varying specializations in the greater metropolitan area of Mumbai. A list including contact details can be consulted on Karmayog. Most private hospitals have an online presence, and you can search for doctors or clinics by area or specialization. A list of selected clinics can also be found via Allianz Worldwide Care.
Please note that you might be expected to pay for medical treatment immediately as an integrated claims system only works for some public-private joint venture insurance companies. To prepare for this eventuality, don’t forget to set aside some easily accessible funds for medical emergencies. In case that you or a family member should suffer from a serious illness that requires prolonged treatment, make sure that your international health insurance also covers the cost of repatriation.
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