Steuererklärung: tax return for Indians in Germany

German tax law is complex but the tax return for most salaried employees is surprisingly doable yourself. Indians arriving in Germany almost always get a refund in their first year (roughly €800 to €2,000) because the system overtaxes you on paper then refunds based on your filing.

The numbers you need

Steuer-ID (Identifikationsnummer) and Steuernummer are two different things. Many Indians use them interchangeably and cause unnecessary confusion. Here is the difference:

Your Steuer-ID is permanent and follows you for life regardless of address changes. Your Steuernummer is linked to the specific Finanzamt that manages your file — so if you move from Munich to Berlin, your Steuernummer changes. When in doubt about which to give someone, use Steuer-ID.

If you lose your Steuer-ID, the BZSt website (bzst.de) has a recovery form that mails it to your registered address.

Tax classes (Steuerklasse)

Germany assigns every worker a Lohnsteuerklasse (wage tax class):

• Klasse 1: single, or married with spouse abroad
• Klasse 2: single parent
• Klasse 3: married, higher earner (spouse is in 5)
• Klasse 4: married, both spouses earning similarly (default for married couples)
• Klasse 5: married, lower earner (spouse is in 3)
• Klasse 6: second job

Indian employees arriving alone start in Klasse 1. When your spouse joins you and registers, you shift to Klasse 4/4. If one of you earns significantly more, filing a Steuerklassenwechsel (class change) to 3/5 reduces monthly withholding.

Who must file

You legally must file a Steuererklärung if:

• You have side income above €410
• Your spouse is Klasse 3 or 5
• You received Arbeitslosengeld, Kurzarbeitergeld, Elterngeld, or similar
• You had multiple employers in one year
• You claimed tax allowances (Freibeträge)

You should file even if not required, because you almost always get money back.

The DTAA: Double Taxation Avoidance Agreement

India and Germany signed a Double Taxation Avoidance Agreement (DTAA) that governs which country taxes what. Indians get several specific provisions wrong — here is what actually matters.

Tax residence tie-breaker rules

The treaty determines your primary tax residence by these rules, in order:

• 182+ days in Germany in a calendar year: Germany is your primary tax residence. Full stop. This is the most common situation for Indians who have been here for more than one full year.
• 60 to 181 days in Germany AND 365+ days in India across the preceding 4 years: both countries can claim you as a resident. You are likely an RNOR (Resident but Not Ordinarily Resident) in India and a partial-year German resident. This is the tricky zone for people in their first year.
• After 2 full calendar years in Germany: you are almost certainly a German tax resident and an Indian non-resident (NRI) for all practical purposes. Consult an Indian CA once to confirm your RNOR-to-NRI transition.

Welteinkommensprinzip: you must declare all worldwide income

Germany taxes residents on their worldwide income (Welteinkommensprinzip). This means your German Steuererklärung must include income from India, not just your German salary. The treaty prevents double taxation by giving you a credit for Indian taxes paid, but the declaration requirement does not go away.

Foreign income goes on Anlage AUS (Auslandseinkünfte). WISO Steuer has a dedicated section for this; ELSTER requires you to add Anlage AUS manually.

Indian bank interest

Interest earned on Indian savings accounts or fixed deposits is technically taxable in Germany once you are a German tax resident. In practice:

• Indian banks issue an interest certificate each financial year. The equivalent for declared income is your Form 26AS or the newer Annual Information Statement (AIS) from the Income Tax India portal.
• The amounts are small for most Indians (a few thousand rupees per year) but should be declared. Convert to euros at the annual average exchange rate published by the Bundesbank.
• If Indian TDS was deducted, Germany gives you credit for it. Keep your Form 26AS as documentation.

NRO vs NRE accounts

This is one of the most common points of confusion:

• NRO (Non-Resident Ordinary) accounts: despite the name, NRO accounts are available to residents of India too. The DTAA does not treat NRO interest as tax-exempt. Interest earned on NRO accounts must be declared on your German Steuererklärung as foreign income.
• NRE (Non-Resident External) accounts: interest on NRE accounts is exempt from tax in India. Germany may still want to know about it under the worldwide income principle, but the treaty typically allows an exemption with progression (Freistellung mit Progressionsvorbehalt) — meaning it is not taxed in Germany but it does push your other income into a higher bracket. In practice, NRE amounts are small for most people and the impact is minimal.

Indian rental income

If you own property in India that you rent out:

1. India taxes the rental income first. Your tenant's TDS (Form 26AS) and your Form 16A from the property manager document this.
2. You declare the gross Indian rental income on Anlage AUS in your German return. Germany gives a tax credit for Indian tax paid.
3. Keep Form 26AS and Form 16A from India as documentation for the German Finanzamt if requested.

Having Indian rental income is one of the stronger reasons to use a Steuerberater or at minimum WISO Steuer (which handles Anlage AUS more cleanly than Taxfix).

What you can claim

Werbungskosten (work-related expenses)

Commuting (Entfernungspauschale)

The commute deduction is calculated on the one-way distance from your registered address (Anmeldung address) to your primary workplace — not the actual route you travel. Use the fastest road route in Google Maps to calculate the distance. The Finanzamt uses the same method.

Many Indians undercount this because they use the actual commute distance or round-trip distance. Use one-way, home-to-office, fastest road route.

• €0.30 per km for the first 20 km
• €0.38 per km from km 21 onwards
• Per working day (multiply by actual days you commuted, not a guess)

Home office (Homeoffice-Pauschale)

€6 per day for each day you worked exclusively from home, up to 210 days per year = maximum €1,260. You do not need a dedicated home office room. Any day where your entire working day was from home counts. Keep a simple log (email calendar or HR system records work well as supporting evidence if ever asked).

Other Werbungskosten

• Work phone, laptop, books, professional training
• Work clothes if required and genuinely non-everyday (a suit worn only to client meetings qualifies; a blazer you also wear socially does not)
• Professional subscriptions: German professional magazines, IEEE membership, O'Reilly subscription if used for work
• Union membership fees (Gewerkschaft)
• Job application costs in Germany (if you were job-hunting in a given year)

Sonderausgaben (special expenses)

• Contributions to German pension (Riester, Rürup)
• Private health insurance premiums
• Donations to German registered charities
• Church tax (Kirchensteuer), if applicable

Außergewöhnliche Belastungen (extraordinary expenses)

• Unreimbursed medical costs above the means-tested threshold
• Support payments to financially dependent relatives abroad — see the dedicated section below, which is especially valuable for Indians

Dependent parents support deduction

One of the most financially significant deductions for Indians in Germany, and one many do not claim because they do not know it exists.

What it is

If you send money to support your parents or parents-in-law in India, you can deduct this as Unterhalt an bedürftige Personen im Ausland under Außergewöhnliche Belastungen (§ 33a EStG). The legal German concept is that you have a maintenance obligation toward your parents if they cannot support themselves — which describes the situation of most retired Indian parents on small pensions or no income.

The numbers in 2026

• Maximum deduction per supported person: approximately €11,784 per year (this equals the German subsistence minimum, Grundfreibetrag, which is updated annually).
• If you support both parents: up to €23,568 per year in deductions.
• Tax saving at the 42% top rate on €23,568: roughly €9,900 per year.
• Even at the 30% effective rate common for mid-salary Blue Card holders, the saving is around €7,000 per year.

This is not a small amount. If you send ₹15,000 to ₹40,000 per month to your parents, you likely qualify.

Requirements

1. The supported person must be legally obligated to receive support from you under German or the applicable foreign law. Parents qualify under both Indian and German maintenance law.
2. They must be unable to support themselves fully — typical for retired Indian parents on a small government pension or no income.
3. You must document the transfers.
4. The parent's own income reduces your maximum deduction. If a parent receives ₹4,000 per month in pension (approximately €43/month or ~€516/year), this amount is deducted from the €11,784 maximum, leaving you with roughly €11,268 in deductible support for that parent.

Documentation you need

• Bank transfer receipts or SWIFT confirmation slips for every transfer (keep these for 7 years)
• A signed declaration from your parent stating they have no significant other income (a simple one-page letter in English is acceptable; some Finanzämter ask for notarization)
• Optionally: a notarized family support statement from an Indian notary if the Finanzamt requests additional proof

How to file it

Use Anlage Unterhalt in your Steuererklärung. WISO Steuer has a dedicated interview for this that walks you through it. Taxfix handles it poorly and sometimes misses the foreign dependent scenario entirely — if this deduction applies to you, WISO Steuer or ELSTER is strongly recommended.

First-year arrival deductions checklist

If you moved to Germany mid-year, your refund is usually larger because wage withholding assumed you would earn for the full year. Make sure you claim everything from your arrival year.

Job-related relocation costs (Umzugskosten) that can be deducted:

• One-way international flight from India to Germany, including baggage fees, if the move was for your job
• First month's hotel or temporary accommodation while you were looking for a flat — keep the receipts
• Language course fees if required for your role (a letter from your employer confirming the requirement strengthens this claim)
• APS certificate fee (applicable to Indian degree holders who needed academic credential verification to apply for a visa)
• ZAB Statement of Comparability fee, if you got your Indian degree recognized through the Zentralstelle für ausländisches Bildungswesen
• Professional books, certification exams, or conferences you attended during the year in your professional capacity
• Home office deduction from day 1 — even if you arrived in October, you can count every day you worked from home after arrival

If you moved for a job within Germany in a later year:

• Umzugskostenpauschale for moves within Germany: approximately €886 for individuals (higher with family) can be claimed as a flat amount without any receipts. If your actual documented moving costs exceed this flat rate, you can claim the higher actual amount instead.

A first-year refund of €1,500 to €3,000 is common for Blue Card holders arriving mid-year.

Common audit triggers for Indians

Not every return is manually reviewed, but certain patterns increase the probability of a Finanzamt query (Rückfrage) or full review:

• Large foreign income declarations without a corresponding German tax credit: if you declare ₹5 lakh in Indian rental income but show zero Indian tax paid, the Finanzamt will want an explanation
• Unusually high dependent support deductions (above €20,000) without strong transfer documentation — this is the most common reason Indians get queries on otherwise clean returns
• Freelance or self-employment income combined with employment income: the combination of Anlage N and Anlage S/G in the same return attracts more scrutiny than pure employment
• Significant discrepancy between declared income and apparent lifestyle: this is rare for salaried employees but relevant if you have investment accounts
• Missing Anlage AUS when the Finanzamt knows you are foreign-born: not illegal but can prompt a question

The best protection is documentation kept for 7 years: bank transfer receipts, Indian tax forms (Form 26AS, Form 16A), and signed declarations from dependent relatives. You do not need to include all of this in your filing — you keep it and produce it if asked.

Which app to use

ELSTER: the official government tool. Free, German-language, functional but ugly. Works for any situation including complex DTAA and Anlage AUS filings. mein-elster.de.

WISO Steuer: around €30. Much better UX than ELSTER. Covers all situations including DTAA, Anlage AUS, Anlage Unterhalt, and foreign rental income. German interface but clearer step-by-step guidance. Recommended for anyone with Indian income, dependent parents, or any complexity beyond a single salaried job.

Taxfix: English-language, €40 to €50 per filing. Chat-style interview. Good for simple tax situations (one salaried job, no side income, no foreign assets). Limited for DTAA cases and does not handle Anlage Unterhalt cleanly. Use only if your situation is genuinely simple.

Steuerbot: similar to Taxfix, also English-friendly. Same limitations for complex cases.

Smartsteuer, Buhl: mid-market desktop/online tools.

For your first filing with DTAA and family dependents, WISO Steuer is the sweet spot. For very simple cases (single Blue Card holder, salary only), Taxfix is fast.

When to hire a Steuerberater

Hire a certified tax advisor if:

• You are a freelancer or self-employed in Germany
• You have rental properties in India with significant income
• Your total worldwide assets include anything complicated (trusts, NRO accounts with significant balances, Indian business ownership)
• You have capital gains from Indian stocks or mutual funds in a given year
• Your first filing flagged issues you do not understand
• You are supporting multiple relatives and want to make sure the deductions are structured correctly the first time

Steuerberater fees are regulated by the Steuerberatergebührenverordnung. A simple employee filing runs €200 to €500. Complex filings with DTAA and foreign assets can hit €1,000+. That fee is itself a Sonderausgabe and can be deducted next year.

The filing timeline

• Tax year = calendar year (January to December)
• Deadline = July 31 of the following year if you self-file. Extended to end of February two years later if you use a Steuerberater.
• Voluntary filings (where you are not legally required to file but want the refund) can be submitted up to 4 years back
• Refund arrives 6 to 12 weeks after Finanzamt processes your filing

Want a Steuerberater who understands Indian tax situations? Browse tax advisors in the directory →

Related guides on this site

• ELSTER: filing your German tax return yourself
• Remote work and home office tax deductions in Germany
• Freelancer life in Germany: Freiberufler, Gewerbe, and taxes
• Opening a bank account in Germany