Who taxes what
| Income | Germany (you live here) | India (as an NRI) |
|---|---|---|
| German salary | Taxed via payroll | Not taxed |
| NRE account / NRE FD interest | Taxable: declare it in your German return (Anlage KAP) | Tax-free |
| NRO interest | Taxable; credit for Indian tax under the treaty | Taxable; banks deduct TDS |
| Rent from Indian property | Generally taxed in India; declare it in Germany as required (it can affect your German rate) | Taxable |
| Indian shares and mutual funds | Gains and dividends are generally taxable in Germany | Rules depend on asset type; TDS often applies to NRIs |
The India–Germany double tax agreement (DTAA) stops the same income being fully taxed twice, usually by giving you credit in Germany for tax already paid in India. It does not make NRE interest tax-free in Germany, which is the most common mistake Indians make.
Accounts you should have
- NRE: for money earned abroad. Repatriable, tax-free in India.
- NRO: for income earned in India (rent, dividends). Convert your old resident savings account to NRO once you become an NRI.
- Update your status as NRI with your bank, broker, mutual funds and PAN-linked accounts.
When you must file an Indian ITR
- Your Indian income is above the basic exemption limit.
- You want a refund of excess TDS (common on NRO interest and property sales).
- You sold property or investments in India with capital gains.
Last updated: 12 October 2026. Estimates only. Not official advice. Always verify with official sources. Residential status follows section 6 of the Income-tax Act, with special rules for Indian citizens with high Indian income. Speak to a chartered accountant in India and a Steuerberater in Germany for your case.