Tax residence in China for Indian taxpayers

China treats you as resident if you have a domicile there — habitual residence by reason of hukou, family or economic interests — or, without one, if you stay 183 days in the calendar year. India counts days over 1 April – 31 March, so both countries can claim you in the same period. Art. 4(2) of the India–China Agreement then decides, and Art. 23 relieves double tax.

Check your status: India and China

Free, no sign-up, about 3 minutes. Conclusion under Indian income-tax law, compared with the law of China and the tax treaty.

When China treats you as a tax resident

China does not use nationality: Chinese and foreign nationals are resident if they have a domicile in China — habitual residence by reason of household registration (hukou), family or economic interests — or, without a domicile, reside in China for 183 days or more in the calendar year. Domicile is a legal standard: a person abroad temporarily for study, work, family visits or travel who returns to live in China when the reason ends keeps China as the place of habitual residence.

An individual without domicile becomes a resident individual with an aggregate of 183 days in China in the calendar year (the 183rd day included). Only days with a full 24 hours in China count — China counts over 1 January – 31 December, not the Indian tax year.

The «six-year rule» does not change resident status; it only decides whether foreign-source income of a resident without domicile that is paid by foreign entities or individuals is taxed in China.

You habitually reside in China by reason of household registration, family or economic interests, so you have a domicile in China. Under Art. 1 of the Individual Income Tax Law you are a Chinese resident individual taxed on your worldwide income, whatever the number of days you spent in China; tax paid abroad is credited within the limit of Art. 7.
You have no domicile in China, but you resided there for 183 days or more in the calendar year, so you are a Chinese resident individual (Art. 1). Because in each of the six preceding years you also had 183 days without a single absence of more than 30 days, all your income — from China and from abroad, including India — is taxable in China.
You have no domicile in China, but you resided there for 183 days or more in the calendar year, so you are a Chinese resident individual (Art. 1). Because in at least one of the six preceding years you had fewer than 183 days or a single absence of more than 30 days, your foreign-source income paid by foreign entities or individuals — for example income from India paid by an Indian payer — is exempt in China after filing a record with the tax authority (Regulations Art. 4). Chinese-source income, including pay for work in China, and foreign income paid by a Chinese entity remain taxable.
You have no domicile in China, but you resided there for 183 days or more in the calendar year, so you are a Chinese resident individual (Art. 1). Whether China also taxes your foreign income depends on the six-year rule: if in each of the six preceding years (counted from 2019) you had 183 days without a single absence of more than 30 days, all income is taxable; otherwise foreign-source income paid by foreign entities or individuals is exempt after filing a record.
You resided in China for 183 days or more in the calendar year, so you are a Chinese resident individual whether or not you have a domicile there (Art. 1). With a domicile, all your income is taxable in China; without one, foreign-source income paid by foreign entities or individuals may be exempt under the six-year rule (Regulations Art. 4).

When you are a nonresident

You have no domicile in China and resided there for fewer than 183 days in the calendar year, so you are a non-resident individual (Art. 1): China taxes only your income from sources in China. Pay for work done outside China is not Chinese-source; with not more than 90 days in China, the part of pay for China work that is paid by a foreign employer and not borne by its establishment in China is exempt (Regulations Art. 5).

Where the rules of China clash with Indian tax rules

Collision: China treats you as resident because of domicile, India counts only days. China treats an individual with a domicile in China — habitual residence by reason of hukou, family or economic interests — as resident whatever the number of days in China. If you keep a Chinese domicile while working in India and are in India for 182 days or more (or 60 days plus 365 days in the four preceding years), both countries claim you. Art. 4(2) of the India–China Agreement decides: permanent home; with a home in both countries, the centre of vital interests; if that cannot be determined, or you have a permanent home in neither, habitual abode; then nationality; then mutual agreement.
Collision: 183 days in China in the calendar year while resident in India. Without a domicile in China, 183 days in China in the calendar year make you a Chinese resident individual. Because the two tax years cover different months, the same period can fall in an Indian tax year in which you are also resident in India — typically in the year you move between the two countries, or under India's 60-day test if you spent 365 days in India in the four preceding years. Art. 4(2) of the India–China Agreement then decides which country is your state of residence, and with it whether China may tax your income from India.

What else to know

Different tax years: 1 April in India, 1 January in China. China's tax year is the calendar year (1 January – 31 December); India's runs from 1 April to 31 March. Each country counts days over its own year: China's 183-day test counts days in China in the calendar year, and only days with a full 24 hours in China count; India's 182-day and 60-day tests count days in India in the Indian tax year. The 183-day limit for salary in Art. 15(2)(a) of the India–China Agreement is counted «in the taxable year concerned»; the Agreement does not define the term, so for Chinese tax it is the calendar year and for Indian tax the Indian tax year.
Income from India of a Chinese resident without domicile: the six-year rule. If you are resident in China only under the 183-day test, China does not tax your foreign-source income paid by foreign entities or individuals — for example rent from property in India, interest on Indian bank accounts, or salary for work done in India paid by an Indian employer — unless in each of the six preceding years (counted from 2019) you had 183 days in China with no single absence of more than 30 days. The exemption requires filing a record with the competent tax authority. Pay for work done in China is Chinese-source even if an Indian employer pays it. If India also treats you as resident, India still taxes your worldwide income, subject to the Agreement.
How India relieves double taxation of Chinese income. If India is your state of residence, you report Chinese income in your Indian return and deduct the Chinese tax paid on it: under Art. 23(2) of the India–China Agreement the deduction may not exceed that part of Indian income-tax which is attributable to the income that China may tax. Claim it with Form No. 44 (rule 76 of the Income-tax Rules, 2026), with a certificate of the Chinese income and tax and proof of payment. If China is your state of residence, China credits Indian tax on income from India against Chinese tax on the same income, up to the Chinese tax on it (Art. 23(1)(a)); a credit in China requires a tax payment certificate issued by the Indian tax authority for the year concerned.
Working in China while resident in India: the 183-day rule (Art. 15(2)). Pay for work physically done in China is Chinese-source wherever it is paid. If India is your treaty residence, China does not tax it only if all three conditions of Art. 15(2) are met: you are in China for not more than 183 days in aggregate in the taxable year concerned (for Chinese tax, the calendar year); the employer is not resident in China; and the pay is not borne by a permanent establishment or fixed base of the employer in China. Chinese domestic law on its own exempts pay from a foreign employer only up to 90 days (Regulations Art. 5). Otherwise China taxes the pay for your China work days and India gives the deduction under Art. 23(2).
Year of arrival or departure: no split year in either country. Neither country splits its tax year: China decides residence for the whole calendar year, India for the whole Indian tax year (1 April – 31 March). In the year you move you can therefore be resident in both countries for overlapping months; the Agreement's tie-breaker applies to the period of dual residence. Keep entry and exit records — China counts only days with a full 24 hours in China.
Social security: no India–China agreement. China's bilateral social security agreements, as reported for 13 countries (Germany, Korea, Denmark, Finland, Canada, Switzerland, the Netherlands, France, Spain, Luxembourg, Japan, Serbia and Kyrgyzstan), do not include India, and China is not on EPFO's list of India's agreements. An employee posted from India to China therefore cannot use an EPFO certificate of coverage to be exempt from Chinese social insurance, and contributions may be due in both countries. Ask your employer how the posting is handled before it starts.

How dual residence is resolved

If both countries treat you as a resident, Art. 4(2) of the treaty applies: Agreement between the Government of the Republic of India and the Government of the People's Republic of China for the elimination of double taxation with respect to taxes on income and the prevention of tax evasion and avoidance (done at New Delhi on 18 July 1994; amended by the Protocol of 26 November 2018). The tests are applied in order — permanent home, centre of vital interests, habitual abode, nationality, and finally mutual agreement between the tax authorities.

Terms you will come across in China

domicile (zhùsuǒ): habitual residence in China by reason of household registration, family or economic interests — makes you resident whatever the days
resident individual (jūmín gèrén): taxed in China on worldwide income
183 days: days in China in the calendar year; only days with a full 24 hours in China count
six-year rule: a resident without domicile is exempt on foreign income paid from abroad unless six prior years each had 183 days without a 30-day absence
comprehensive income: wages, service fees, author's remuneration and royalties taxed together at 3%–45%
hukou: Chinese household registration — one of the factors of domicile

Questions

I am an Indian posted to China for two years — am I a Chinese resident?

Yes, in every calendar year in which you spend 183 days or more in China (only full 24-hour days count). Without a Chinese domicile, your foreign-source income paid from abroad — for example Indian rent or interest — is exempt in China under the six-year rule after filing a record.

Does China tax my salary for a short business trip if I remain resident in India?

Not if all conditions of Art. 15(2) of the India–China Agreement are met: not more than 183 days in China in the taxable year concerned, an employer not resident in China, and pay not borne by a permanent establishment or fixed base in China.

How does India avoid double taxation of Chinese income?

If India is your state of residence, it allows a deduction for the Chinese tax, limited to the part of Indian income-tax attributable to that income (Art. 23(2)); you claim it with Form No. 44.

Sources

Legislation and official guidance

Individual Income Tax Law of the People's Republic of China (seventh amendment of 31 August 2018), Art. 1 — An individual who has a domicile in China, or who has no domicile but resides in China for an aggregate of 183 days or more in a tax year, is a resident individual and is taxed on income from inside and outside China. An individual with neither domicile nor residence in China, or with no domicile and fewer than 183 days, is a non-resident individual taxed only on income from inside China. The tax year is the calendar year (1 January – 31 December).
Implementation Regulations of the Individual Income Tax Law (State Council Decree No. 707), Art. 2 — Having a domicile in China means habitually residing in China by reason of household registration (hukou), family or economic interests.
Provisions on Several Issues concerning the Levy of Individual Income Tax (Guoshuifa [1994] No. 89), Art. 1 — Habitual residence is a legal standard for deciding whether a taxpayer is resident or non-resident; it does not mean the place of actual residence or of residence in a particular period. A person who lives abroad for study, work, family visits or travel and must return to live in China once the reason ends has China as the place of habitual residence.
MOF/STA Announcement No. 34 of 2019 — For an individual without domicile, days of residence are the days of stay in China: a day with a full 24 hours in China counts, a shorter stay does not. If such an individual resides 183 days in a tax year and in each of the six preceding years also had 183 days with no single departure of more than 30 days, both Chinese-source and foreign-source income is taxable for that year; otherwise foreign-source income paid by foreign entities or individuals is exempt. The six years are counted from 2019 onward.
Implementation Regulations of the Individual Income Tax Law, Art. 4 — An individual without domicile who has resided in China for 183 days in each of fewer than six consecutive years is, after filing a record with the competent tax authority, exempt on foreign-source income paid by foreign entities or individuals; a single departure of more than 30 days in any year restarts the count.
Implementation Regulations of the Individual Income Tax Law, Art. 3 — Unless otherwise provided, income from services performed in China through office, employment or performance of a contract is income from sources in China, wherever it is paid.
Implementation Regulations of the Individual Income Tax Law, Art. 5 — An individual without domicile who resides in China for an aggregate of not more than 90 days in a tax year is exempt on the part of Chinese-source employment income that is paid by a foreign employer and not borne by the employer's establishment or place in China.
MOF/STA Announcement No. 3 of 2020 (individual income tax on foreign-source income) — Income from services performed outside China is foreign-source income. Foreign comprehensive and business income is combined with domestic income of the same kind; other categories are computed separately. The credit limit is computed per country (region); excess credit can be carried forward for five tax years; no credit without a qualifying tax certificate; tax spared under a treaty is treated as paid. Residents declare foreign income between 1 March and 30 June of the following year. Where the foreign tax year differs from the calendar year, the calendar year in which the foreign tax year ends is the corresponding year.
Income-tax Act, 2025, s. 6(1)–(2) — Residential status is determined for each tax year. An individual is resident in India in a tax year if in India for 182 days or more in that year, or for 60 days or more in that year and 365 days or more in the four years preceding it.
Art. 15(2) India–China Agreement — Remuneration of a resident of one State for employment exercised in the other State is taxable only in the first State if (a) the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in the taxable year concerned, (b) the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State, and (c) it is not borne by a permanent establishment or fixed base which the employer has in the other State. «Taxable year» is not defined in the Agreement; under Art. 3(2) each State gives it the meaning under its own law.
Art. 4(2) India–China Agreement (1994) — Individual resident of both States: (a) resident of the State in which he has a permanent home available to him; if he has a permanent home available to him in both States, of the State with which his personal and economic relations are closer (centre of vital interests); (b) if the centre of vital interests cannot be determined, or if he has not a permanent home available to him in either Contracting State, of the State in which he has an habitual abode; (c) habitual abode in both Contracting States or in neither of them — the State of which he is a national; (d) national of both Contracting States or of neither of them — the competent authorities settle the question by mutual agreement.
Art. 23 India–China Agreement (Art. 23(1)(a) and 23(2) as amended in 2019) — China: Indian tax payable under the Agreement on income from India is credited against Chinese tax on that income, not exceeding the Chinese tax on that income (Art. 23(1)(a)). India: a deduction from Indian tax equal to the tax paid in China, which shall not exceed that part of the Indian income-tax which is attributable to the income which may be taxed in China (Art. 23(2)). Tax treated as paid includes tax that would have been payable but for incentives granted for economic development (Art. 23(3)).
Income-tax Act, 2025, s. 159 — The Central Government may enter into agreements for relief from double taxation and avoidance of double taxation; where an agreement applies, the Act applies only to the extent more beneficial to the assessee (s. 159(4)). A non-resident may claim treaty relief only with a certificate of residence from the other country's government and the prescribed documents and information (s. 159(8)).
Income-tax Rules, 2026, rule 76; Forms No. 44 and 45 — A resident gets credit for foreign tax in the tax year in which the income is taxed in India; credit is the lower of the Indian tax on that income and the foreign tax, per source and per country; not against interest, fees or penalties; disputed foreign tax only after settlement (Form No. 45, within 6 months of the month of settlement). Form No. 44 with a certificate of income and tax and proof of payment, within 12 months from the end of the tax year if the return was filed on time; accountant verification if foreign tax is ₹1,00,000 or more. Conversion at the TT buying rate.
Implementation Regulations of the Individual Income Tax Law, Arts 21–22 — The credit limit is computed separately for each country (region). If tax paid in a country is lower than the limit, the difference is paid in China; the excess can be credited against the unused limit for the same country in later years, for at most five years. A credit claim requires the tax payment certificate issued by the foreign tax authority for the year concerned.
China News Service report (republished by gmw.cn, 29 October 2025) — Since 2001 China has signed bilateral social security agreements with 13 countries: Germany, Korea, Denmark, Finland, Canada, Switzerland, the Netherlands, France, Spain, Luxembourg, Japan, Serbia and Kyrgyzstan.
EPFO — International Workers: Social Security Agreements — India's social security agreements operate with Belgium, Germany, Switzerland, Luxembourg, France, Denmark, Korea, the Netherlands, Hungary, Finland, Sweden, the Czech Republic, Norway, Austria, Canada, Australia, Japan, Portugal, Brazil and Quebec. EPFO issues a certificate of coverage to employees posted to those countries, so they avoid contributing in the host country; periods count toward pension eligibility.
Individual Income Tax Law, Art. 3 and rate schedules — Comprehensive income: progressive rates of 3% to 45% (annual taxable income up to ¥36,000 — 3%; ¥36,000–144,000 — 10%; ¥144,000–300,000 — 20%; ¥300,000–420,000 — 25%; ¥420,000–660,000 — 30%; ¥660,000–960,000 — 35%; above ¥960,000 — 45%). Business income: 5% to 35%. Interest, dividends, rental income, gains from transfer of property and incidental income: 20%.
Individual Income Tax Law, Art. 6 — Taxable comprehensive income of a resident individual: annual income less ¥60,000 and special, special additional and other deductions. Non-resident individual: monthly wages less ¥5,000; remuneration for personal services, author's remuneration and royalties per payment.
Individual Income Tax Law, Art. 7 — A resident individual may credit individual income tax paid abroad on income from outside China against the Chinese tax payable, but not beyond the Chinese tax on that foreign income computed under the Law.
Individual Income Tax Law, Arts 10, 11 and 13 — Filing is required, among other cases, for foreign-source income and for non-resident individuals with wages from two or more sources in China. Comprehensive income is withheld in advance monthly or per payment and reconciled between 1 March and 30 June of the following year; foreign-source income is declared between 1 March and 30 June of the following year; tax on a non-resident's wages is withheld by the payer with no annual reconciliation.
Art. 4(2)(a) India–China Agreement (1994) — Resident of the State in which he has a permanent home available to him; if he has a permanent home available to him in both States, resident of the State with which his personal and economic relations are closer (centre of vital interests).
Art. 4(2)(b) India–China Agreement (1994) — If the centre of vital interests cannot be determined, or if he has not a permanent home available to him in either Contracting State, the individual is deemed a resident of the State in which he has an habitual abode.
Art. 4(2)(c)–(d) India–China Agreement (1994) — Habitual abode in both Contracting States or in neither of them — resident of the State of which he is a national; national of both Contracting States or of neither of them — the competent authorities settle the question by mutual agreement.

Updated 04/11/2026. The result is for information only and is not tax or legal advice. Tax authorities and courts may interpret the rules differently, including because of circumstances not covered here, and the law changes. Consult a qualified adviser before making decisions.

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