394. Tax on money sent to

India from abroad and then

brought back . . .

Questions: Sir, I have couple of questions for you please let me know I wired transferred one hundred and fifty thousand Canadian dollars in 2008,2009 and 2010 by ICICI Canada bank to my NRE a/c to buy residential land in India . 1.If i bring that one hundred and fifty thousand dollars back to Canada by selling the plot do i need to pay any income tax in Canada on this amount of 150,000.As you know sir these were my savings for which the income tax was already paid in Canada 2.I understand i have to pay capital gain in India,but do i have to pay capital gain in Canada as well after selling my property in India 3.My wife is an Indian citizen (I got my Canadian citizenship and oci in 2011) our normal banking accounts are joint which were opened before becoming nri, is it ok to keep the accounts as such 4.I am planning to do 7 months in Canada and 5 months in India do you have any business or job ideas in your gut so that i can work upon Thank you so much and best regards Jagatjit Answer: Lets consider your questions one by one: 1. Suppose, you had not sent the money and kept it in Canada. If you made any income from this money, then the income would be taxable. Similarly, since the money was sent from Canada and brought back, obviously there would be no tax involved but any income that was earned in India is liable to taxes in Canada as you continue to maintain residency status in Canada. I also want to bring to your attention that Canadian residents, who held interest in foreign property valued at more than $100,000 in a foreign country, are required to declare this in their yearly tax return by filling Form 1135. To see a sample of the form CLICK HERE 2. Canadian residents we are required to report worldwide income and pay the applicable tax on it. Capital gains is taxable income subject to the allowable deductions in Canada and under the Double Tax Avoidance Agreement between Canada and India. My understanding is that half the total amount of capital gain is taxed in Canada at your taxable rate. You should consider seeking professional guidance. Pay close attention to the word ‘RESIDENT’ for taxation purposes in Canada. You may look into the possibility of becoming a non-resident in Canada for taxation purposes. This will help you avoid paying taxes in Canada on your Indian income, if you finally do settle down to start a business in India. Becoming a non resident for taxation purposes will not effect your Canadian citizenship. 3. If your wife is a Indian citizen living with you in Canada, then she is a NRI and cannot hold resident bank accounts in India as this is illegal. 4. I have topics such as Nri business opportunities and business ideas for India in my book THE NRI GUIDE. If interested, you can purchase it from our website homepage. .