India-Sweden Tax Treaty: How to Avoid Paying Tax Twice as an Indian in Sweden

Buddy Hive
7 min read · Oct 12, 2026

If you live in Sweden and still have money in India, both countries may want to tax the same money. Sweden, because you live there. India, because the money comes from India. The India-Sweden tax treaty is an agreement between the two countries. It decides who can tax what, so you do not pay twice.

This guide explains the treaty in simple words, with the everyday cases most Indians in Sweden have. It is a short introduction to help you understand the topic. It is not official or legal advice.

Want a quick answer for your own case? Use our Which country taxes my money? tool. Pick what you have in India and see how much India and Sweden each take.

What the treaty does

India and Sweden signed the treaty in 1997 and changed it in 2013. It helps you in three ways:

1. Some money is taxed in one country only. For example, your Swedish salary is taxed only in Sweden. So is the profit on most Indian shares.
2. India can only take a small part. On interest and dividends from India, India can take at most 10%.
3. Sweden takes off the Indian tax. When both countries tax the same money, Sweden takes the Indian tax off your Swedish tax. In total, you pay only the higher of the two taxes.

Moving your own money between Sweden and India is not income, so neither country taxes it.

Who taxes what

Salary

Salary for work you do in Sweden is taxed only in Sweden. Salary is taxed where you do the work. Short work trips to India do not change this, as long as:

• you spend no more than 183 days in India in any 12 months,
• your employer is not Indian, and
• your salary is not paid by an office of your employer in India.

Pay from the Indian government is taxed only in India, unless you are a Swedish citizen living in Sweden.

Interest

NRO interest: India takes at most 10%. Sweden takes the rest, up to its 30%. Without the two treaty papers (see below), banks keep back about 31%.

NRE and FCNR interest: Sweden only. India does not tax it while you live abroad. You still add it to your Swedish tax return.

Dividends

India takes at most 10%. Sweden takes the rest, up to its 30%. Without the two treaty papers, the company keeps back a little over 20%.

Selling shares, funds and property

Property in India is taxed in both countries, but you do not pay twice. India taxes your profit. The buyer must keep back the tax and pay you the rest. Sweden taxes the profit too, but takes off the Indian tax. Shares in a company that mostly owns property in India count as property.

Most Indian shares and funds are taxed only in Sweden. There is one exception. If you sell within four years of moving out of India, India can still tax your profit. Indian brokers and fund companies often keep back tax anyway. You can get it back by filing a tax return in India.

Owning Indian mutual funds

Sweden charges a small tax every year just for owning funds, even if you never sell them. It is 120 SEK for every 100,000 SEK your funds are worth. India takes nothing while you only own them.

Swedish banks tell Skatteverket about your funds, but Indian fund companies do not. So you add this to your Swedish tax return yourself:

1. Take what your funds were worth on 1 January, in SEK.
2. Write 0.4% of that in box 7.1 (Schablonintäkter).
3. Sweden taxes that amount at 30%.

For funds worth 100,000 SEK, you write 400 SEK and pay 120 SEK.

Skatteverket says this only applies if your fund counts as the same kind of fund as a Swedish one. If you are not sure about a fund, ask Skatteverket.

Pensions

A pension from India can be taxed in both countries, but you do not pay twice. India can tax pensions and other regular payments from India. Sweden taxes them too, but takes off the Indian tax. A pension from the Indian government is different. Only India taxes it, unless you are a Swedish citizen living in Sweden.

It also works the other way. A Swedish pension paid to someone living in India can be taxed in both countries. After you move back, you ask Skatteverket for SINK. This is a flat tax for people who live abroad. It is 22.5% in 2026 and 20% from 2027. India can tax the pension too, but takes off the Swedish tax.

In your first years back in India, you may count as "not ordinarily resident" (RNOR). Then India usually does not tax money you earn outside India.

Freelance work for Indian clients

If you live in Sweden and freelance for clients in India, your income is usually taxed only in Sweden. India can only tax it if you have a fixed office in India, or spend 183 days or more there in any 12 months.

Indian clients often keep back tax before they pay you. To stop this, give them the two treaty papers below. If they still keep back tax, get it back by filing a tax return in India. Sweden will not take it off your Swedish tax, because the treaty does not let India charge it.

If you work through your own Swedish company (AB), different rules apply, and India can take up to 10%.

Inheritance and gifts

Neither country taxes an inheritance or a gift from family. Sweden has no inheritance tax or gift tax. India has no inheritance tax, and gifts from close family are tax-free. But what the money earns later, like interest, is taxed as normal.

How Sweden takes off Indian tax

In your Swedish tax return, ask Sweden to take off the tax you paid in India. This is how you avoid paying twice.

• Sweden takes the Indian tax off the Swedish tax on the same money. It never takes off more than the Swedish tax on that money.
• Sweden only takes off what the treaty lets India charge. If your bank kept back 30% on NRO interest, Sweden takes off only 10%. You get the rest back by filing a tax return in India.
• In your Swedish tax return, this is called avräkning av utländsk skatt. Add proof of the Indian tax, like the tax certificate from your bank, or your tax statement from the Indian tax website.

The two papers that lower Indian tax to 10%

Without these, Indian banks keep back about 31% instead of 10%.

1. Proof that you live in Sweden for tax (hemvistintyg). You get it from Skatteverket.
2. Form 41 (once called Form 10F). You fill it in on the Indian income tax website, with your PAN (Indian tax number).

Give both to your bank, your client or the company before they pay you. Keep copies for your tax return in India.

If both countries say you live there

This mostly matters in the year you move. Under the treaty, only one country counts as your home. Usually it is the country where you have a permanent home. If you have a home in both, the treaty looks at where your family, work and money are. If that does not decide it, it looks at where you usually live, and then at your citizenship. If that still does not decide it, the tax offices of the two countries agree between them.

Sources

• Riksdagen: the treaty text, SFS 1997:918 (in English)
• Skatteverket: SINK on pensions
• Skatteverket: schablonintäkt on funds, including foreign funds (in Swedish)
• Skatteverket: credit for foreign tax (in Swedish)
• Income Tax Department: Form 41 FAQ
• Income Tax Department: residential status, including RNOR
• Income Tax Department: gifts from relatives

This guide is not official, legal or tax advice. It is a simple introduction, so you understand the basics and know what to look up next. Rules and rates change, and every case is different. Check with Skatteverket, the Income Tax Department or a tax adviser before you file or move money.