Easy Guide: Tax Rules for Sending Big Money from Germany to India
Many countries don’t tax money coming in from other countries because it’s good for them. But the country sending the money might have taxes or rules about how much you can send.
In Germany, there’s a rule called AWV for big money transfers. It helps the government keep track of money going to other countries.
What Counts as a Big Money Transfer from Germany?
In Germany, if you send more than €12,500 (about 11 lakh rupees) to another country, you need to tell the government about it.
What are the Tax Rules for Big Money Transfers from Germany to India?
If you live in Germany and send more than €12,500 to India, you need to tell the German government. Even if you send two separate payments that add up to more than €12,500, you still need to report it.
You need to report:
- Money transfers to other countries
- Payments by check to other countries
- Cash put into a foreign bank account
If an Indian person in Germany sends money to India, they don’t pay tax in India. But the person getting the money in India might need to pay tax, depending on why they got the money:
- Money for family needs like education or medical care isn’t taxed.
- A gift to someone who isn’t family might be taxed if it’s more than 50,000 rupees.
What is DTAA Between Germany and India?
DTAA is an agreement between Germany and India to make sure people don’t pay tax twice on the same money. It covers different types of taxes in both countries.
How to Handle Tax Rules for Big Money Transfers from Germany to India?
- Understand the tax rules in both countries.
- Figure out if the money you’re sending will be taxed.
- Know what you need to report. In Germany, you must report big transfers within 7 days of the next month.
- When reporting, you need to tell:
- Why you’re sending the money
- That you’re sending money out
- How much you’re sending
- When you’re sending it
- Which country you’re sending it to
- Report to the German bank (Deutsche Bundesbank) by phone or email.
Conclusion
When sending a lot of money from Germany to India, you need to know the rules in both countries.
In Germany, you must report transfers over €12,500. In India, the person getting the money might need to pay tax, depending on why they got the money.
FAQS’
1. How are tax rules different in Germany and India for big money transfers?
Ans- Germany wants you to report transfers over €12,500. India might tax the person getting the money, depending on why they got it.
2. Can people pay less tax when sending big money from Germany to India?
Ans- Yes, there’s an agreement between Germany and India (called DTAA) that can help avoid paying tax twice.
3. Do you need to tell anyone when sending big money from Germany to India?
Ans- Yes, in Germany, you must tell the Deutsche Bundesbank if you send more than €12,500.
4. How does the agreement between Germany and India affect taxes on big money transfers?
Ans- The agreement helps make sure you don’t pay tax twice on the same money. It gives ways to reduce or avoid extra taxes.
5. Are there ways to pay less tax on big transfers to India?
Ans- Yes, the agreement between Germany and India has some ways to pay less tax, like lower rates on some types of money and no tax on things like pensions or student earnings.
6. Do I need to pay tax on gifts sent from Germany to India?
Ans- If the gift is to family for things like education or healthcare, it’s usually not taxed. For non-family, it might be taxed if it’s over 50,000 rupees.
7. What happens if I don’t report a big money transfer in Germany?
Ans- Not reporting transfers over €12,500 can lead to fines, so it’s important to inform the German authorities.
8. Can I split the money into smaller amounts to avoid reporting?
Ans- No, if the total amount exceeds €12,500, even in separate payments, you still need to report it.
9. How quickly do I need to report big transfers from Germany?
Ans- You must report transfers over €12,500 to the German government within 7 days of the following month.
10.Does everyone need to report big money transfers in Germany?
Ans- Yes, anyone sending over €12,500 from Germany to another country must report it, whether it’s an individual or a business.
