Canadian government pensions when you retire in India

The question

A Canadian citizen planning to retire in India wants to know which of their Canadian government pensions will keep paying after they leave Canada, and what tax treatment to expect on the other side.

The short answer: CPP follows you anywhere. OAS follows you if you meet the residency bar. GIS stops. The 2015 Canada–India social security agreement can bridge some gaps. A 25% Canadian withholding tax normally applies on pensions paid to non-residents, reduced for most people by the Canada–India tax treaty.

The three pillars of Canadian retirement income

Pillar	What it is	Payable outside Canada?
CPP (Canada Pension Plan)	Contributory — based on your working years and contributions	Yes, anywhere in the world
OAS (Old Age Security)	Residency-based — paid from general revenue	Yes, if you meet the 20-year rule or qualify through a social security agreement
GIS (Guaranteed Income Supplement)	Needs-based top-up for low-income OAS recipients	No — stops after six months outside Canada

CPP — the easy one

The Canada Pension Plan is based on what you contributed during your working years. It is payable anywhere in the world, for life, regardless of where you live in retirement.

You can start CPP as early as age 60 (reduced) or as late as age 70 (increased). Each month of deferral past 65 adds to the monthly amount.
The amount is indexed to inflation and adjusted annually.
You can have CPP deposited directly to an Indian bank account.

Quebec residents have the parallel QPP (Quebec Pension Plan), which works the same way for our purposes and is also payable abroad.

OAS — the residency test matters

OAS is designed around Canadian residency. The default rule is that if you leave Canada, OAS stops after six months of absence. Two exceptions let you keep OAS for life abroad:

1. The 20-year rule

You can continue to receive OAS after leaving Canada if both are true:

You were a Canadian citizen or legal resident the day before you left Canada, and
You lived in Canada for at least 20 years after turning 18.

If you meet this, OAS follows you to India with no end date.

2. The Canada–India social security agreement

If you fall short of 20 years in Canada, the Canada–India social security agreement can still let you receive OAS abroad. Signed on 29 July 2015 and in force since 1 August 2015, it allows periods of residence or contribution in each country to be combined for eligibility purposes:

Years of coverage in India can help you meet the minimum 10-year Canadian residency needed to receive OAS at all.
Years of coverage in India can help you meet the 20-year threshold needed to continue receiving OAS outside Canada.

The agreement also prevents double social-security contributions for people working across the two countries and coordinates CPP/EPF treatment.

Note: Eligibility under the agreement uses Indian "periods of coverage" (broadly, time where contributions were made to the Employees' Provident Fund or you were otherwise covered), not just years lived in India. Service Canada assesses this case by case when you apply.

OAS amount and the clawback

OAS amounts are set quarterly and indexed to inflation. Two levers affect what lands in your account:

Deferral bonus: you can delay OAS up to age 70, adding 0.6% per month of deferral (up to 36% at age 70). Useful if you expect other income in your late 60s.
Recovery tax (clawback): high-income recipients repay part or all of OAS once worldwide income crosses the annual threshold. For most retirees in India this will not bite, but it's worth knowing about.

GIS — stops when you leave

The Guaranteed Income Supplement is a top-up for low-income OAS recipients, and it is strictly a Canada-resident benefit. GIS payments stop after six months outside Canada, regardless of how long you lived in Canada before, and regardless of the social security agreement. If you rely on GIS, a permanent move to India means losing it.

If you move back to Canada later, you can re-apply.

Tax — both sides of the border

This is where retirees get tripped up. Two tax systems are in play.

Canadian withholding tax

Once you become a non-resident of Canada for tax purposes, pension payments to you are subject to non-resident withholding tax. The default rate is 25%, but the Canada–India Double Taxation Avoidance Agreement (DTAA) reduces this substantially for most pension payments — commonly to 15% for periodic pension payments, and in some cases the source country gives up taxing rights altogether.

To get the treaty rate you need to file Form NR5 with the CRA to have reduced withholding applied at source, and keep it current (it typically lasts five years). Without NR5, you'll have 25% withheld and will need to reclaim the difference by filing a Canadian non-resident return.

At year end, Service Canada issues an NR4 slip showing gross pension income and tax withheld. Keep these — you'll need them when filing in India.

Indian tax

Once you are a Resident and Ordinarily Resident in India, your worldwide income — including Canadian pensions — is taxable in India. The DTAA lets you claim credit for the Canadian tax withheld, so you aren't taxed twice on the same income, but you do need to report the foreign pension in your Indian return under "Income from other sources".

On arrival in India you will typically be RNOR (Resident but Not Ordinarily Resident) for up to three years, during which foreign income is generally not taxed in India. Plan the timing of pension drawdowns around this window if you can — it's a meaningful one-time saving.

Practical steps before and after the move

Before you leave Canada

Apply for CPP and OAS if you're at the eligibility age, or note the earliest date you can.
File Form NR5 with the CRA to set up reduced treaty withholding on pensions.
Notify Service Canada of your new address and banking details. Direct deposit to Indian bank accounts is supported for CPP and OAS.
Make sure you have an Indian bank account that accepts foreign inward remittances (NRO is the standard choice for pension receipts).

After you arrive in India

Track your residency status year by year. The RNOR window is valuable.
Keep NR4 slips from Service Canada each year.
File your Indian return disclosing the foreign pension and any Canadian tax withheld, and claim DTAA credit where applicable.
Remember Schedule FA (foreign assets) in the Indian return once you are Resident and Ordinarily Resident — Canadian bank accounts, investment accounts, and RRSPs all need to be reported.

Bottom line

CPP is yours for life wherever you live. OAS follows you if you've spent 20 years in Canada after 18, or if the Canada–India agreement helps you bridge the gap. GIS is a Canada-only benefit and stops when you move. Plan the tax side early — file NR5, learn the DTAA rate, and use the RNOR window to your advantage.