Canada taxes its residents on their worldwide income and asks detailed questions about property held abroad. In return it offers generous tax-sheltered accounts. Getting the most from them means understanding how the two tax systems meet.
Tax in two countries
The Canadian tax year is the calendar year. Returns are due on 30 April, or 15 June if you are self-employed, though any tax owed is still due on 30 April. India’s financial year runs from April to March.
As a Canadian resident, you report Indian income on your Canadian return: rent, interest on NRO and NRE deposits, and capital gains. Tax deducted in India can be credited on Form T2209 under the India-Canada tax treaty. Our
Canada tax guide
explains how the credit works.
Two things surprise many NRIs. Canada does not treat India’s PPF or NPS as registered plans, so growth inside them can be taxable in Canada. And if the total cost of your property abroad, including Indian bank balances, deposits, shares and a flat you rent out, exceeds CAD 100,000 at any point in the year, you must file Form T1135. The test uses what you paid, not what the assets are worth now.
Canada’s tax-sheltered accounts
- RRSP. Contributions reduce your taxable income. The limit for 2026 is 18% of your previous year’s earned income, up to CAD 33,810. If your employer matches contributions, take the match first.
- TFSA. Up to CAD 7,000 a year (2026), with tax-free growth and withdrawals in Canada. India does not recognise the TFSA, so its growth becomes taxable in India once you are Indian resident again.
- FHSA. First-time buyers can put in CAD 8,000 a year, up to CAD 40,000, deduct it like an RRSP and withdraw it tax-free for a first home.
Banking, sending money and investing
Convert your Indian resident account to NRO and use an NRE account for money you send from Canada. Our
NRI banking guide
explains the difference. Canadian bank wires are expensive, so compare providers on our
INR converter
or the
CAD transfer guide
first.
Some Indian fund houses restrict Canadian residents because of reporting rules, much as they do US residents. Check our
AMC eligibility checker
before you invest.
Saving money in Canada
Figures are as of September 2026.
- RESP. The Canada Education Savings Grant adds 20% to the first CAD 2,500 you put into a child’s RESP each year, up to CAD 500 a year and CAD 7,200 over the child’s lifetime.
- Canada Child Benefit. A tax-free monthly payment for families with children under 18. Newcomers apply once they are resident, with forms RC66 and RC66SCH, and payments depend on filing a return every year.
- GST/HST credit. A quarterly payment for lower and middle incomes. Newcomers in their first year apply on form RC151.
- Health cover on arrival. Some provinces make newcomers wait up to three months for provincial health insurance. Check yours, and buy private cover for the gap.
- Newcomer bank packages. The large banks offer newcomers accounts with monthly fees waived for the first year, and sometimes a credit card without a Canadian credit history.
- Cards on trips home. Most Canadian credit cards add 2.5% to purchases made in rupees; a few charge no foreign transaction fee at all.
- NEXUS. For frequent trips to the US, NEXUS costs USD 120 for five years (since October 2024) and speeds up crossings. Canadian permanent residents can apply.
If you move back to India
When you stop being Canadian resident, Canada treats you as having sold most of your assets at market value, and taxes the gain on your final return. Plan for it well before you leave. Your CPP pension can be paid to you in India, and the Canada-India social security agreement, in force since 2015, can help you qualify for Old Age Security. Our guide to
moving back to India
covers the Indian side.
