Tax residence in Japan for Indian taxpayers

Japan has no day test: you are resident if the base of your life is in Japan or you have lived there for a year — and a job of a year or more makes you resident from arrival. India counts days over 1 April – 31 March. If both countries claim you, Art. 4(2) of the India–Japan Convention has no tie-breaker tests: the two tax authorities decide by mutual agreement.

Check your status: India and Japan

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

When Japan treats you as a tax resident

A Japanese resident is an individual with a domicile (the base of life) in Japan or with a residence in Japan continuously for one year or more. Japan has no day-count test. Nationality matters only for the deeming rule for public servants and for the non-permanent resident category.

A person who takes up an occupation abroad that normally requires living abroad continuously for one year or more is presumed not to have a domicile in Japan. An employee transferred to an overseas branch — for example in India — for a planned year or longer generally falls under this rule.

Domicile is the base of your life, determined by objective facts — residence, occupation, location of assets, where your relatives live, nationality — and not by the number of days alone.

A person without Japanese nationality who takes up an occupation in Japan that normally requires living there for one year or more is presumed to have a domicile in Japan; a person who has had a residence in Japan continuously for one year or more is also resident.

As a Japanese national or local public servant you are deemed to have a domicile in Japan even while working abroad without one (Income Tax Act art. 3). You are a Japanese resident taxed on all income arising in and outside Japan.
The base of your life (domicile) is in Japan. Under art. 2(1)(iii) of the Income Tax Act you are a Japanese resident (not a non-permanent resident) taxed on all income arising in and outside Japan.
You have lived in Japan continuously for one year or more, or you are presumed to have a domicile there because your occupation requires living in Japan for one year or more (art. 2(1)(iii) of the Income Tax Act; Enforcement Order art. 14). You are a Japanese resident taxed on all income arising in and outside Japan.
You have a domicile in Japan or have lived there for one year or more, you do not have Japanese nationality, and your total time of domicile or residence in Japan in the past 10 years is 5 years or less, so you are a «non-permanent resident» (art. 2(1)(iv)). Japan taxes your income other than foreign-source income, and foreign-source income — for example from India — only if it is paid in Japan or remitted to Japan.
You have a domicile in Japan or have lived there for one year or more, and your total time of domicile or residence in Japan in the past 10 years exceeds 5 years, so you are a resident other than a non-permanent resident. Even without Japanese nationality, Japan taxes all your income arising in and outside Japan.
You are a Japanese resident. If your total time of domicile or residence in Japan in the past 10 years is 5 years or less, you are a non-permanent resident (foreign-source income taxed only if paid in Japan or remitted there); if it exceeds 5 years, all income is taxable. Check the periods from your entry and departure dates.

When you are a nonresident

You have an occupation abroad that normally requires living outside Japan continuously for one year or more, so you are presumed not to have a domicile in Japan (Enforcement Order art. 15). As a non-resident you are taxed in Japan only on Japan-source income. The presumption can be rebutted by the facts.
The base of your life is not in Japan and you have not lived there continuously for one year or more. As a non-resident you are taxed in Japan only on Japan-source income (Income Tax Act art. 2(1)(v), art. 7).

Where the rules of Japan clash with Indian tax rules

Resident of both countries: the India–Japan Convention has no tie-breaker tests. If Japan and India both treat you as resident, Art. 4(2) of the Convention does not apply the usual permanent home, centre of vital interests, habitual abode and nationality tests: the competent authorities of the two countries decide by mutual agreement which country you are resident of for the purposes of the Convention. Until they do, each country may tax you as its resident, and each relieves double taxation by credit under Art. 23. A case under the mutual agreement procedure (Art. 25) must be presented within three years from the first notification of the action giving rise to taxation not in accordance with the Convention. Keep evidence of your home, family, work and days in each country.
Collision: Japanese residence from arrival for a job of a year or more. If you come to Japan for an occupation that normally requires living there for one year or more, Japan presumes a domicile in Japan from your arrival — there is no minimum number of days (Enforcement Order art. 14). India decides your status for the whole Indian tax year: in the year you leave you stay resident in India with 182 days or more in India, and — unless you are an Indian citizen leaving for employment abroad — also with 60 days and 365 days in the four preceding years. For the overlapping months both countries treat you as resident, and the Convention leaves the question to mutual agreement.

What else to know

No day test in Japan; calendar year there, 1 April in India. Japan has no day-count test: you are resident if the base of your life (domicile) is in Japan or you have lived there continuously for one year or more, and Japanese income tax is computed for the calendar year. India counts days over its own tax year (1 April – 31 March). The 183-day limit for salary in Art. 15(2)(a) of the India–Japan Convention counts days «during any taxable year or previous year, as the case may be» — for Japanese tax the Japanese taxable year (the calendar year), for Indian tax the previous year.
Non-permanent resident: income from India taxed in Japan only if paid or remitted there. As a non-permanent resident of Japan you are taxed there on foreign-source income — for example salary for work done in India, rent from Indian property or interest on Indian accounts — only to the extent that it is paid in Japan or remitted to Japan; the foreign tax credit is limited to that part too. India still taxes your worldwide income if you are resident and ordinarily resident in India. Once your domicile or residence in Japan exceeds 5 years in total within 10 years, Japan taxes your worldwide income.
How India relieves double taxation of Japanese income. If India is your state of residence, you report Japanese income in your Indian return and deduct the Japanese tax paid on it: under Art. 23(2)(a) of the India–Japan Convention the deduction may not exceed that part of Indian income tax which is attributable to the income that Japan may tax. Claim it with Form No. 44 (rule 76 of the Income-tax Rules, 2026). If Japan is your state of residence, Japan credits Indian tax on income from India against Japanese tax, subject to the Japanese foreign tax credit rules (Art. 23(3)(a); art. 95 of the Income Tax Act: credit limit, 3-year carry-forward, documents proving the Indian tax attached to the return).
Working in Japan while resident in India: the 183-day rule (Art. 15(2)). Pay for work physically done in Japan is Japan-source. If India is your treaty residence, Japan does not tax it only if all three conditions of Art. 15(2) are met: you are in Japan for not more than 183 days in aggregate during the Japanese taxable year; the employer is not resident in Japan; and the pay is not borne by a permanent establishment or fixed base of the employer in Japan. Otherwise Japan withholds or assesses tax on the pay for your Japan work days and India gives the deduction under Art. 23(2)(a). Remember that a dual resident's treaty residence under this Convention is settled only by mutual agreement.
Leaving Japan for India: non-resident from the day after departure. If you are transferred to India for a year or more, Japan presumes that you have no domicile in Japan (Enforcement Order art. 15) and you are usually a non-resident from the day after departure. For the year of departure you declare all income up to departure plus Japan-source income afterwards — by 15 March of the next year if you appointed a tax agent, otherwise by the time you leave. The inhabitant tax is charged by the municipality where you lived on 1 January, so it is due for the year you leave. Afterwards Japan taxes only Japan-source income, and India credits that Japanese tax under Art. 23(2)(a).
Year of arrival or departure: Japan splits the year into resident and non-resident periods, India does not. Japanese residence starts when you acquire a domicile in Japan — for a job of a year or more, from arrival — or on the day after one year of residence, and ends on departure; the income of that year is divided into a resident period and a non-resident period. India has no split year: your status is decided for the whole Indian tax year (1 April – 31 March). Overlapping periods of residence are settled by mutual agreement under Art. 4(2) of the Convention.
Japanese exit tax: leaving with securities of ¥100 million or more. If, when you leave Japan, you hold securities etc. worth ¥100 million or more and had a domicile or residence in Japan for more than 5 years in the 10 years before departure, Japan taxes the unrealised gains as if you had sold them (Income Tax Act art. 60-2). Payment can be deferred for 5 years (up to 10) if you appoint a tax agent and provide security, and the tax is cancelled if you return within that period. India's credit under Art. 23(2)(a) covers Japanese tax only on income that Japan may tax under the Convention; check with an adviser how a later sale is taxed in India.
Social security: India–Japan agreement in force. Japan's social security agreement with India is in force — it is on the Japan Pension Service list of agreements in force, and Japan is on EPFO's list of India's agreements. It decides which country's pension and health insurance system a worker belongs to, so that contributions are not paid twice: an employee posted temporarily can stay in the home system with a certificate of coverage. Periods in both countries can be counted together for pension eligibility (the agreements without totalisation are those with the UK, Korea, China and Italy). Check the posting limit and the certificate procedure with EPFO or the Japan Pension Service before the posting.

How dual residence is resolved

If both countries treat you as a resident, Art. 4(2) of the treaty applies: Convention between the Government of Japan and the Government of the Republic of India for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income (signed at New Delhi on 7 March 1989; amended by the Protocols of 24 February 2006 and 11 December 2015). 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 Japan

jūsho (domicile): the base of your life in Japan, judged by home, work, family, assets and nationality
kyosho (residence): a place where you actually live that is not the base of your life; one year of it makes you resident
non-permanent resident (hi-eijūsha): a non-Japanese resident with 5 years or less in Japan in the past 10 years: foreign income taxed only if paid in or remitted to Japan
year-end adjustment (nenmatsu chōsei): the employer's annual settlement of tax withheld from salary
inhabitant tax (jūminzei): local income tax of about 10%, charged where you live on 1 January
nōzei kanrinin: tax agent a non-resident appoints to deal with Japanese returns

Questions

I moved to Japan on a two-year contract — when do I become a Japanese resident?

From arrival: an occupation that normally requires living in Japan for one year or more creates a presumption of domicile in Japan (Enforcement Order art. 14). India may still treat you as resident for the Indian tax year of departure.

What if both India and Japan treat me as resident?

The India–Japan Convention has no permanent home or vital interests test: under Art. 4(2) the competent authorities decide by mutual agreement. Until then both may tax you, with credits under Art. 23; present a mutual agreement case within three years (Art. 25).

Does Japan tax my Indian rent while I am a non-permanent resident?

Only to the extent the income is paid in Japan or remitted to Japan. After more than 5 years in Japan within 10 years, Japan taxes your worldwide income.

Sources

Legislation and official guidance

Income Tax Act (Japan), art. 2(1)(iii)–(v) — Resident: an individual who has a domicile in Japan, or who has had a residence in Japan continuously for one year or more up to the present. Non-permanent resident: a resident who does not have Japanese nationality and has had a domicile or residence in Japan for a total of 5 years or less within the past 10 years. Non-resident: an individual other than a resident.
Income Tax Act (Japan), art. 3 — National and local public servants (excluding those without Japanese nationality and others specified by Cabinet Order) are deemed to have a domicile in Japan even for periods in which they have no domicile in Japan. Matters needed to determine domicile are prescribed by Cabinet Order.
Order for Enforcement of the Income Tax Act, art. 15 — An individual who has come to live outside Japan is presumed not to have a domicile in Japan if (1) he or she has an occupation that normally requires living abroad continuously for one year or more, or (2) he or she has a foreign nationality or foreign permanent residence permit and there are no facts — such as relatives sharing living expenses in Japan — suggesting a return to live mainly in Japan. Family members living with that person and sharing living expenses are treated the same.
NTA Tax Answer No. 1926 (law as of 1 April 2026) — An employee of a Japanese company transferred to an overseas branch for a planned period of one year or more is generally presumed not to have a domicile in Japan and becomes a non-resident. In the year of departure, if a tax agent is appointed, all income of the resident period and Japan-source income of the non-resident period are declared between 16 February and 15 March of the following year; without a tax agent, a final return is filed by the time of departure. Rent from Japanese real estate is in principle subject to 20.42% withholding.
Basic Circular on Income Tax 2-1 to 2-4 — Domicile means the base of a person's life and is determined by objective facts (2-1). Where the purpose of going abroad is clearly temporary (a spouse left in Japan, a home kept for living in after return, etc.), the person is treated as keeping a residence in Japan while abroad (2-2). A person with no domicile on entry is a non-resident until the day one year after entry and a resident from the following day (2-3). The «one year» is counted from the day after the day of entry (2-4).
NTA Tax Answer No. 2012 (law as of 1 April 2026) — Whether the base of life is in Japan is decided by objective facts such as residence, occupation, location of assets, where relatives live and nationality. It is not decided by days of stay alone, so a person can be a Japanese resident even after staying abroad for 183 days or more. A person resident of both countries is assigned by the tax treaty, with mutual agreement between the authorities where necessary.
Order for Enforcement of the Income Tax Act, art. 14 — An individual who has come to live in Japan is presumed to have a domicile in Japan if (1) he or she has an occupation that normally requires living in Japan continuously for one year or more, or (2) he or she has Japanese nationality and a spouse or other relatives sharing living expenses in Japan, or other facts suggesting continuous residence in Japan for one year or more. Family members living with that person and sharing living expenses are treated the same.
Income Tax Act (Japan), arts 5 and 7; NTA Tax Answer No. 2010 — Residents other than non-permanent residents are taxed on all income arising in and outside Japan. Non-permanent residents are taxed on income other than foreign-source income and on foreign-source income paid in Japan or remitted from abroad. Non-residents are taxed only on Japan-source income.
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–Japan Convention — 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 during any taxable year or «previous year», as the case may be, (b) the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State, and (c) the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State. «Taxable year» and «previous year» are not defined (Art. 3(2): domestic meaning).
Art. 4(2) India–Japan Convention (1989) — Where by reason of paragraph 1 a person is a resident of both Contracting States, the competent authorities of the Contracting States shall determine by mutual agreement the Contracting State of which that person shall be deemed to be a resident for the purposes of the Convention. Article 4 contains no permanent home, centre of vital interests, habitual abode or nationality test. The MLI replaces the dual-residence rule only for persons other than individuals.
Art. 25 India–Japan Convention (mutual agreement procedure) — A person who considers that the actions of one or both States result in taxation not in accordance with the Convention may present the case to the competent authority within three years from the first notification of that action.
Art. 23 India–Japan Convention — India (Art. 23(2)(a)): a deduction from the tax on the income of an Indian resident equal to the Japanese tax paid in Japan, not exceeding that part of the income tax (as computed before the deduction) which is attributable to the income which may be taxed in Japan. Japan (Art. 23(3)(a)): Indian tax payable on income from India is allowed as a credit against the Japanese tax imposed on the Japanese resident, subject to the Japanese laws on the credit for tax paid outside Japan.
Income-tax Act, 2025, s. 6(3), (6) — The 60-day test does not apply to an Indian citizen who leaves India in the tax year as a member of the crew of an Indian ship or for employment outside India; only the 182-day test applies. Days of crew on a voyage are counted as prescribed.
Income Tax Act (Japan), art. 95; NTA Tax Answer No. 1240 — A resident who pays foreign income tax deducts it from Japanese income tax up to the credit limit (income tax for the year × adjusted foreign income ÷ total income); the excess is credited up to the limit for special reconstruction income tax. Unused limits and excess credits carry forward for 3 years. For non-permanent residents only foreign income paid in or remitted to Japan counts. Tax above the treaty rate is not creditable. A statement of foreign tax credit and documents proving the foreign tax are attached to the return.
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.
Income Tax Act (Japan), arts 161, 212, 213; NTA Tax Answer No. 2884 — Payers of Japan-source income to non-residents withhold tax: 20.42% on salary and other remuneration for personal services, retirement allowances, real estate rent, loan interest and royalties; 15.315% on dividends and interest on listed shares. Treaty reduction or exemption is claimed by filing the «Application Form for Income Tax Convention» through the payer by the day before payment.
Ministry of Internal Affairs and Communications — Individual inhabitant tax — Individual inhabitant tax is levied on persons with a domicile in a municipality (prefecture) on 1 January of the year. The income levy is 10% (4% prefectural, 6% municipal) of the previous year's income (1 January – 31 December); the per-capita levy is a fixed amount. Employees' tax is normally deducted from salary.
Income Tax Act (Japan), art. 60-2; NTA Tax Answer No. 1478 — A resident who on departure holds securities etc. worth ¥100 million or more and had a domicile or residence in Japan for more than 5 years in total within the 10 years before departure is taxed on the unrealised gains (exit tax). Payment can be deferred for 5 years (extendable to 10) by appointing a tax agent and providing security; the tax can be cancelled on return within that period (claim within 4 months of return).
Japan Pension Service — Social security agreements (updated 27 October 2025) — Agreements in force: Germany, the UK, Korea, the U.S., Belgium, France, Canada, Australia, the Netherlands, the Czech Republic, Spain, Ireland, Brazil, Switzerland, Hungary, India, Luxembourg, the Philippines, Slovakia, China, Finland, Sweden, Italy and Austria (in force 1 December 2025). The agreements with the UK, Korea, China and Italy only prevent double contributions (no totalisation of pension periods).
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.
Income Tax Act (Japan), art. 89; NTA Tax Answer No. 2260 — Seven brackets on taxable income: 5% (under ¥1.95 million), 10% (under ¥3.3 million), 20% (under ¥6.95 million), 23% (under ¥9 million), 33% (under ¥18 million), 40% (under ¥40 million), 45% (¥40 million or more). For 2013–2037, special reconstruction income tax of 2.1% of the base income tax is also payable. The special defence income tax of the 2026 reform applies from 2027 (total rate unchanged).
Income Tax Act (Japan), arts 120–121; NTA Tax Answer No. 1900 — Most employees' tax is settled by the year-end adjustment and no final return is needed; a final return is required, for example, for annual salary over ¥20 million, other income over ¥200,000, or salary from a payer with no Japanese withholding obligation.
Act on Submission of Statement of Overseas Wire Transfers, art. 5; NTA Tax Answer No. 7456 — A resident (other than a non-permanent resident) holding foreign assets worth more than ¥50 million in total on 31 December files a statement of foreign assets with the tax office by 30 June of the following year; failure increases penalty tax and can be punished.
Ministry of Finance Japan — the MLI and the Japan–India Convention — Japan–India Convention signed 7 March 1989, in force 29 December 1989; amending Protocols signed 24 February 2006 (in force 28 June 2006) and 11 December 2015 (in force 29 October 2016). The MLI entered into force for Japan on 1 January 2019 and for India on 1 October 2019; its Art. 4(1) assigns dual-resident persons other than individuals.

Case law

Supreme Court of Japan, Second Petty Bench, 平成20年(行ヒ)第139号, 18/02/2011 — A gift-tax case on «domicile» (former Inheritance Tax Act art. 1-2(1)). A person posted to Hong Kong who spent about two thirds of the posting period there was held not to have a domicile in Japan when the gift was received, even though he spent about a quarter of the period in Japan, worked in Japan as well and adjusted his days in Japan to avoid tax. A tax-avoidance purpose alone does not place a domicile in Japan.

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.

Check your status