NRI vs EU Tax Residency: A Practical Guide for Indian Expats in France and the EU

When it comes to understanding your tax status as an Indian living abroad—especially in countries like France or elsewhere in the EU—one of the most confusing aspects is navigating “residency” from the perspective of two different tax systems: India’s NRI rules and Europe’s tax residency criteria.

At L’Association Frehindi, we often help fellow Indians and South Asians clarify these issues—especially those who are new to France or planning to invest or maintain income ties with India. In this blog, we demystify these systems using real-life examples and comparisons, helping you stay compliant and avoid unwanted surprises.

Who is a Non-Resident Indian (NRI) According to Indian Law?

India does not define an NRI based simply on nationality. It is all about the number of days you spend in India in a financial year, and certain income thresholds.

As per Section 6 of the Income Tax Act, 1961, you are considered a Resident Indian if:

• You spend 182 days or more in India in the previous financial year; OR

• You spend 60 days or more in India in the previous year and 365 days or more in the preceding 4 years.

If neither of these conditions is met, you are an NRI.

However, post-2020 rules have tightened this definition, especially for high-income individuals.

Example:

Priya, a software engineer working in Lyon, visits India for 5 months every year and earns ₹18 lakhs annually from a property rental and mutual funds in India. If she stays more than 120 days and earns over ₹15 lakhs, she could lose her NRI status and be taxed as a Resident Indian, unless she proves she is a tax resident in France.

What About France and the EU?

Most EU countries, including France, determine tax residency not by passport or ethnicity, but by where you live and work.

In France, you are considered a French tax resident if:

1. France is your main home (“foyer fiscal”),

2. You work in France, even if the job is part-time or hybrid,

3. Your economic interests are centered in France (example: income, investments, insurance).

So, for someone like Amit, who has moved from Delhi to Marseille for a long-term work contract, the French system sees him as a tax resident of France, even if he is still earning a pension from India.

Can You Be a Tax Resident in Both India and France?

Yes—but it’s complicated. This is where the Indo-French Double Taxation Avoidance Agreement (DTAA) comes into play.

Under the DTAA:

• If you are considered a resident in both countries, then “tie-breaker rules” (like place of permanent home, habitual abode, nationality) determine your residency.

• You are not taxed twice on the same income.

• You may claim tax credit in one country for taxes paid in another.

Income Tax Implications for NRIs

Let’s break down how India taxes NRIs:

If you are a French resident, like Laxmi, who submits income taxes in France but still owns assets in Delhi, she must file ITR-2 in India annually for her Indian earnings, and submit her French tax return (Déclaration des revenus) as well.

NRI vs French Resident: A Common Confusion

Let’s take Ravi’s story.

Ravi, a PhD student in Paris, receives a French scholarship and also earns ₹20 lakhs yearly from a YouTube channel registered in India. He visited India for 4 months last year.

• In France: He is a tax resident and must declare global income, including Indian earnings.

• In India: Since he earned more than ₹15 lakhs and stayed over 120 days, the Indian tax department might treat him as Resident Indian—unless he proves French tax residency using DTAA rules.

This kind of situation is exactly where L’Association Frehindi steps in—to advise young Indian professionals and students on maintaining clear and legal residency status in both countries.

Forms NRIs Must Know (For Filing Indian Income Tax)

You can file online at incometax.gov.in or take support from certified Indian tax advisors.

FEMA vs Income Tax Act

Remember: While Income Tax laws decide your tax status, the Foreign Exchange Management Act (FEMA) governs what kinds of accounts (NRE/NRO) and investments you can hold in India as an NRI.

Final Tip: What Should Expats in France/EU Keep in Mind?

✅ Track how many days you stay in India each year.
✅ Know whether your income in India crosses ₹15 lakh.
✅ Check if you are liable to pay tax in France or other EU nations.
✅ Declare all income properly in both India and your resident country.
✅ Use DTAA clauses to avoid double taxation.
✅ Don’t forget to file ITR in India, even if you’re abroad.

Final Word: Stay Informed, Stay Compliant

As global mobility increases, so does the complexity of cross-border tax and residency rules. For Indian expats living in France or elsewhere in the EU, understanding the difference between Indian NRI status and European tax residency is more than a legal formality—it’s key to avoiding penalties, protecting your income, and planning a stable financial future.

Whether you’re a student like Ravi, a professional like Priya, or a retiree managing assets back home, the Indo-French DTAA, FEMA regulations, and annual ITR filings are not just bureaucratic hurdles—they’re tools to help you manage your global identity responsibly.

At L’Association Frehindi, we are committed to guiding Indians and South Asians across Europe with trusted information, personal advice, and community-based support. Backed by the Indian Embassy in Paris and collaborating with other embassies across the EU, we ensure that you don’t have to navigate this journey alone.

📲Let’s Stay in Touch

💬 Join our WhatsApp community for Indian expats in France — a trusted space for real-time questions, support, and shared experiences.
📞 Connect directly at +33 6 27 92 43 98 for personalized guidance.
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🇮🇳🤝🇫🇷
With Frehindi by your side, navigating life across borders becomes a little easier — and a lot more reassuring.

Warm regards,
Haru Mehra
President,
L’Association Frehindi
A not-for-profit association under French Law 1901

📧 haru@frehindi.com | 🌍 www.frehindi.org | 📞 +33 6 27 92 43 98