Your Indian tax liability as an NRI in Germany depends on your 'residential status' under Section 6 of the Income Tax Act, decided every year by day-count, not by your OCI/citizenship status. As a Non-Resident, only income that is earned or received in India is taxable in India. Separately, Germany treats a person as fully tax-liable (unbeschraenkt steuerpflichtig) if they have a domicile (Wohnsitz) or habitual abode (gewoehnlicher Aufenthalt) in Germany, and the India-Germany Double Taxation Avoidance Agreement then prevents the same income being fully taxed twice.
How Indian residential status is decided -- the day-count rules
Per the Income Tax Department's own guidance, an individual is a Resident of India in a
tax year if they meet either of two tests: (a) present in India for 182 days or more in that
year, or (b) present for 60 days or more in that year AND 365 days or more
across the preceding four years. Anyone who fails both tests is a Non-Resident (NRI) for
that year.
Special relaxations that matter for people based in Germany
- Indian citizens leaving India for employment abroad are tested only against the
182-day rule for that year.
- Indian citizens/PIOs visiting India are also generally tested against 182 days,
EXCEPT that a 120-day rule applies instead of 60 days if the person's total
Indian-sourced income exceeds ₹15 lakh in that year.
- Deemed Resident: an Indian citizen with more than ₹15 lakh of Indian-sourced
income who is not liable to tax in ANY other country is deemed an Indian resident regardless of days
spent in India.
Germany's own residency test -- domicile and habitual abode, not day-count alone
Separately from India's rules, German tax law (the Abgabenordnung, Germany's fiscal code) treats a
person as fully tax-liable in Germany (unbeschränkt steuerpflichtig, meaning worldwide income is in
scope) if they have either a domicile (Wohnsitz) -- broadly, a dwelling they keep and use --
or a habitual abode (gewöhnlicher Aufenthalt) in Germany, which is generally presumed
where someone is physically present in Germany for more than six months. This is a different mechanism from
India's day-count test and the two are applied entirely independently -- someone can be non-resident in
India while fully tax-liable in Germany, or vice versa.
The India-Germany DTAA -- avoiding being taxed twice on the same income
India and Germany have a bilateral Double Taxation Avoidance Agreement. Where the same income (for
example, Indian rental income that Germany may also tax on a worldwide-income basis) could otherwise be
taxed in both countries, the DTAA lets the taxpayer claim credit in one country for tax already paid in the
other, under the article of the treaty that applies to that income type. To claim DTAA relief in India, an
NRI typically needs a certificate of tax residency from the German tax office (Finanzamt) and to file Form
10F.
Filing an Indian tax return as an NRI
An NRI must file an Indian Income Tax Return if their total Indian income exceeds the basic exemption
limit, or in certain other specified situations. NRIs typically use ITR-2 or ITR-3 depending on the nature
of their Indian income.
Does holding an OCI card make me an Indian tax resident?
No. Residential status for tax purposes depends entirely on physical presence in India during the
relevant year under Section 6.
Can I be fully tax-liable in both India and Germany in the same year?
It's uncommon but not impossible, since the two countries' tests are independent -- India's Section 6
day-count test and Germany's domicile/habitual-abode test are applied separately. Where dual liability
genuinely arises, the DTAA's tie-breaker provisions and tax credit mechanism address the resulting
double-taxation risk.
Is NRE account interest really tax-free in India?
Yes, interest earned on NRE and FCNR accounts is exempt from Indian income tax as long as the account
holder retains non-resident status under FEMA -- NRO account interest is taxable.
How do I get a certificate of tax residency from Germany to claim DTAA benefits?
The local Finanzamt (tax office) issues a certificate of tax residency on request for German tax
residents, which is then submitted along with Form 10F to Indian tax authorities to claim DTAA
relief.
