My doubt is whether I invest in the Indian market in the mutual funds, possibly generate gains out of it, and pay the taxes in India, do I also have to pay taxes in Germany as I do my full-time job here, or do I need to state that Income here in Germany as well, or is it completely exempted here.
Harsh, I believe there is DTAA treaty between India and Germany. When you file your taxes in Germany, you should be able to show the taxes paid in India to get credit for it and avoid double taxation.
But how does it work, as the tax on ltcg gains in germany are 25% + 5.5% solidarity!
My major concern are the tax rules fair enough that pay taxes in the country where lower tax rates are posed so in this casee for example paying 15% ltcg tax in India and thats it!
Or is the final tax would be like germany looks at the final income and substract the tax thats paid in india cuz of the double treaty but still then impose then remaining tax!
Is there any other method to avoid this income avoid getting taxed in Germany
It is the latter. Germany will give you credit for the amount of tax you have already paid in India and deduct that from the final tax owed.
If not sure, hire an accountant/tax preparer just this once to file your taxes in Germany.
Hi @HARSH_AGRAWAL,
You do get tax credits for the amount of taxes paid in one country. It depends on the DTAA treaty though. It is recommended you get in touch with a tax professional in Germany so they can provide you clarity on this.