Moving back to India from Germany?
Here's what changes for your German pensions, RSUs, brokerage accounts, and tax residency.
ISO Certified
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SEBI RIATax residency
When do you become an Indian tax resident again?
Your residency status is determined by days spent in India.
Either of these makes you a tax resident
Rule 1
182 days or morein India during one financial year.
Rule 2
60 days or more this yearand365 days or more across the previous 4
Once you're a resident, your global income, including German dividends and capital gains, becomes taxable in India. Your move date relative to the financial year can shift this by a full year.
Note: You must formally deregister (Abmeldung) and give up all physical access to your German dwelling to sever your German tax residency, otherwise Germany will continue to tax your worldwide income.
Transitional status
What is RNOR, and why does it matter?
Between NRI and ordinary Indian resident, there's a transitional status called Resident but Not Ordinarily Resident (RNOR). During this window, your German-sourced income is generally not taxed in India.
You qualify if
- 1You were an NRI for 9 of the previous 10 years, or
- 2You spent fewer than 730 days in India over the previous 7 years.
RNOR window typically lasts
2 – 3 years
Outside Indian tax during RNOR
- ✓Capital gains from selling German stocks
- ✓Dividends from EU equities
- ✓German rental income
- ✓Interest from German bank accounts
Crucial Rule: To utilize these exemptions, funds must be received in your German bank account first. Direct wiring to an Indian account makes them taxable.
Filing requirements
Disclosures and filings at each stage
Your filing obligations are limited during RNOR, and ramp up sharply once you become an Ordinary Resident.
| Requirement | NRI | RNOR | Ordinary Resident |
|---|---|---|---|
| German income taxable in India | No | No | Yes |
| Schedule FA (foreign asset disclosure) | No | No | Yes |
| Schedule FSI (foreign source income) | No | No | Yes |
| Form 67 (foreign tax credit claim) | No | No* | Only if claiming foreign tax credit |
| Advance tax on foreign income | No | No | Yes |
| Black Money Act penalties for non-disclosure | No | No | Yes |
* Form 67 may apply to an RNOR in case of foreign income that becomes taxable in India.
The key shift from RNOR to Ordinary Resident: your global income becomes taxable, and you need to disclose all brokerage accounts and holdings, pensions (bAV, Riester), and property to the Indian tax authorities.
Brokerage accounts
What happens to your German brokerage accounts?
When you move back, you become a non-EU resident. Most German neo-brokers and banks do not support non-residents and may restrict your account or force you to liquidate.
Option 1: Transfer in-kind (Recommended)
Move your entire eligible portfolio to an India-friendly global broker like Paasa without selling. No capital gains triggered.
Option 2: Liquidate your holdings
Sell your positions immediately and manage the cash, factoring in German progressive tax rates.
Equity compensation
What happens to your RSUs and stock options?
Tax treatment depends heavily on your residency status on the vesting date, but Germany apportions the gain based on workdays.
1. Vesting during NRI status
Taxed as ordinary German employment income. The Finanzamt withholds wage tax (Lohnsteuer) on the full value at vesting.
2. Vesting during RNOR
Germany taxes the portion of the vesting value equivalent to your German workdays. India does not tax this foreign employment income.
3. Vesting after becoming ordinary resident
Full value is added to Indian income. Germany taxes its apportioned share; India taxes the full amount but provides a foreign tax credit.
Retirement accounts
What happens to your foreign retirement accounts?
Germany has statutory (GRV), company (bAV), and private (Riester/Rürup) pension schemes. They are treated entirely differently when you leave.
| Account | Action on Departure | German Tax | Indian Tax (as Ordinary Resident) |
|---|---|---|---|
| Statutory (GRV) | Refundable (after 24 months) | None (employee share refunded) | Not taxable if refunded before returning |
| Company (bAV) | Cannot be cashed out | Taxable at retirement age | Likely exempt under DTAA Art. 18 |
| Private (Riester) | Withdrawal allowed but penalized | Loss of state subsidies | Taxable at slab rate |
Property
What happens to your German property?
There is no exit tax on German real estate. You can continue to hold and rent it out indefinitely.
Rental income
Taxed in Germany at progressive rates. You must file a German return annually. India taxes it after you become ROR but provides a foreign tax credit.
Capital gains on sale
If sold within the 10-year speculation period, Germany fully taxes the gain. After 10 years, it is tax-free in Germany. India taxes the gain once you are a full ROR, but offers a foreign tax credit.
Exit tax
Will you owe the German Exit Tax (Wegzugsbesteuerung)?
Most Retail Investors
If you have lived in Germany for fewer than 7 years, or hold less than €500,000 in a single fund, you generally avoid the exit tax on your portfolio.
Large Single-Asset Portfolios
If you lived in Germany for 7+ of the last 12 years AND hold over €500,000 in a single ETF or 1%+ of a fund, Germany taxes your "paper profits" as a deemed sale upon departure.
FAQ
Common questions returning German NRIs ask
Country guides
Guides for where you're returning from
Each guide breaks down brokerage, retirement, tax, and exit considerations for your origin country.
How Paasa helps
Built for returning Indian professionals
From navigating your RNOR window to generating exact Schedule FA filings, Paasa is the financial home for your transition back to India.
In-kind brokerage transfers
Move eligible accounts from German brokerages so you don't book taxable capital gains.
Estate Tax Protection
Direct access to Ireland-domiciled UCITS ETFs, allowing you to legally shield your investments from the 40% US Estate Tax applied to non-residents holding US equities.
Schedule FA and FSI reports
Year-end disclosures generated for every foreign holding, tailored exactly for Indian reporting requirements.
LRS-compliant remittance
Send money abroad under the USD 250,000 annual window to keep compounding your wealth globally.
RNOR-aware strategy
Built around your specific planning window so you can optimize cost-basis resets before the window closes.
You own your assets
Your holdings are held in your name at our global custodian, Interactive Brokers.
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Book a call with a Paasa advisor to map out your German exit (pension refunds/strategies, exit tax, and Schedule FA filings).