Canadian citizens in India

Returning to India from Canada . . .

Canadians of Indian origin who are planning to move back to India, should ensure that they adjust their residency status in Canada, before leaving. This way, they can avoid paying taxes on their foreign income in Canada.

Steps to take when leaving Canada

permanently

Notify Revenue Canada of your intent to leave, and give them the date of your intended departure. Chances are that your departure date may become the day you are considered to have become a non- resident. Those who receive credits such as GST or HST, Child tax benefits etc. should notify the appropriate authorities of their intended departure. Once you leave Canada, you will no longer qualify for these benefits. In case you do receive a cheque for such payments, make sure you don't cash it. Notify CRA of such payments so that they can update the appropriate records. Take steps to close your bank accounts, credit cards, your provincial health card, etc. It is to your benefit to make sure that you show that you are indeed breaking all ties with Canada and are moving abroad either permanently or indefinitely. To assess the tax obligations of Canadians living abroad the Canadian Revenue Agency (CRA) uses "residency status" as the criteria. Residency for tax purposes does not merely refer to where you physically live; actually residency status has no effect on citizenship or immigration. To determine residency for tax purposes, the CRA will look into what connections you have to Canada. The CRA has four categories to classify Expatriate Canadians for tax purposes: 1. Factual Resident 2. Deemed Resident 3. Non-Resident 4. Deemed Non-Resident

Factual residents

You are considered to be a factual resident of Canada, if you keep significant residential ties in Canada, while living or travelling outside the country. Those classified as factual residents are considered to be a resident of Canada for income tax purposes. Deemed Resident This classification usually would refer to a person who even though they do not maintain residential ties to Canada, they file Canadian tax returns. An example of this category would be government employees who are stationed abroad.

Non-Residents

Those who have no ties with Canada will usually fall under non-resident classification. Such people would have severed just about all their residential ties to Canada, and live abroad permanently. Those classified as non-residents for tax purposes in Canada, are not taxed on their worldwide income. They are taxed only on income from Canadian sources.

Deemed Non-Resident

A person who is a resident of a country that has a tax treaty with Canada is usually deemed as a non- resident and is subject to the same rules as those in the non-resident category. Since Canada does have a tax treaty with India, OCI and PIO card holders who start living in India may fall under this category. As a deemed non-resident, only income from your Canadian sources is taxed.

Canadian Income may be taxable in

India

As time goes by and your RNOR status in Indian runs out, your Canadian income will become taxable in India. You will however get relief by way of tax credits in India for any taxes paid on your Canadian income to Canadian tax authorities. Canadian Revenue Agency (CRA) has an excellent website and can be accessed for complete details on various aspects of Canadian taxes that may apply to expats. Their website address is: https://www.canada.ca/en/services/taxes.html