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Canada–India Tax, FEMA & Financial Advisory for NRIs & OCIs.
In short
Indian-origin Canadian PRs and citizens remain NRIs for Indian tax based on physical presence. Canadian departure on return triggers deemed disposition of non-registered assets; pair this with Indian RNOR cost-basis sequencing. RRSP and TFSA lose Canadian shelter once you are Indian-resident; T1135 and Schedule FA need synchronised disclosures during the changeover year.
Last reviewed: June 2026 · Updated for AY 2026-27
What do Canada NRIs ask first?
The same four pillars (tax, FEMA, property, return) apply everywhere — but the order changes by corridor. Here's where Canada cases usually start.
- 01RRSP and TFSA treatment on return
- 02T1135 foreign-asset reporting
- 03CRA departure return
- 04India-Canada DTAA
- 05Coordinating filing seasons
How do we help Canada NRIs?
Book a focused advisory call tailored to your corridor.
- 01Canada-India return planning call
- 02RRSP/TFSA & departure tax review
- 03T1135 and Schedule FA alignment
Deep reads for Canada NRIs.
Step-by-step explainers for the Canada corridor.
- 01Return to India from Canada checklist
- 02Return to India planning and RNOR
- 03Residential status under Section 6 (NRI, RNOR, resident)
- 04DTAA relief for NRIs — Form 44 (earlier Form 67), TRC, tax credit
- 05NRE/NRO/FCNR setup
- 06Selling Indian property as an NRI
- 07TDS Section 395 (earlier section 197) route
- 08OCI & FEMA basics
What changes when you return to India from Canada?
What makes a permanent return from Canada different, from more than 250 NRI Come Back Plans prepared by Regi Tom Antony & Associates in the last ten years. Regi returned to India himself after around 20 years abroad.
- 01Departure tax: leaving Canada is a deemed disposition of many non-registered assets. Align it with the cost base you will carry into India.
- 02RRSP and TFSA: the TFSA shelter is not recognised in India, and RRSP withdrawals after departure face Canadian withholding with treaty relief to claim.
- 03Foreign assets: T1135 obligations end with Canadian residence; Indian Schedule FA begins in your first ROR year.
| Status | Indian-source income | Foreign-source income | Schedule FA (foreign assets) |
|---|---|---|---|
| Non-resident (NR) | Taxed | Not taxed if earned and received outside India | No |
| Resident but Not Ordinarily Resident (RNOR) | Taxed | Taxed only if received in India, or derived from a business controlled in, or a profession set up in, India | No |
| Resident and Ordinarily Resident (ROR) | Taxed | Taxed on worldwide income, with DTAA relief for foreign tax paid | Yes |
Keep exploring.
Step-by-step ITR filing: forms, residential status, Schedule FA and refunds.
The day-count tests that decide whether you are NRI, RNOR or resident.
RNOR sequencing and a personal move-back roadmap.
Browse every NRI tax, FEMA and return guide.
Got a question specific to Canada?
Mention the country and life stage — we'll send back a corridor-specific reply.
Leaving Canada: the departure-year mechanics
When you stop being a Canadian resident, Canada treats you as having sold most of your property at fair market value on the day you leave — the deemed disposition. Canadian real estate, registered plans such as RRSPs and TFSAs, and certain pensions are excluded. If the total fair market value of your property exceeds CAD 25,000 on departure, Form T1161 is filed with your final return, and tax on the deemed gain can be deferred by posting security with the CRA.
How India sees the same assets
India does not adopt Canada's departure value. When you later sell an asset as an Indian resident, the Indian gain is computed on your original cost, so the same growth can be taxed twice without careful credit planning. Selling selected non-registered holdings before you become ordinarily resident in India — often during the RNOR years, when foreign-source gains are outside Indian tax — is usually cleaner than holding them through the changeover.
RRSP, TFSA and RESP after the move
You can keep an RRSP and TFSA after leaving Canada, but you cannot contribute to a TFSA as a non-resident, and Canada applies non-resident withholding on RRSP withdrawals. India does not recognise either wrapper: once you are ordinarily resident, income inside a TFSA is taxable in India like any portfolio, and RRSP withdrawals need treaty and Form 44 (earlier Form 67) credit planning. Canada is a notified country under Section 158 (earlier section 89A), so check whether Form 40 (earlier Form 10EE) relief helps align Indian tax with withdrawals.
Answered, candidly.
- Does India recognise my Canadian RRSP as tax-deferred?
- Not as deferred — withdrawals are typically taxable in India once you're resident, with DTAA credit for Canadian withholding. RNOR-year withdrawals can be substantially more efficient.
- What happens to my TFSA after I return to India?
- The TFSA loses its shelter — India does not recognise it. Growth and dividends become taxable in India once you're resident. We typically model whether to liquidate pre-move or hold as a non-sheltered portfolio.
- How does CRA departure tax interact with Indian basis?
- Canada deems disposition of most assets at fair market value on emigration, triggering capital gains. India uses cost-of-acquisition. We document the deemed-disposition value so future Indian sales aren't double-taxed.
The frameworks on this page are drawn from NRI Tax Blueprint 2025 — written by Regi Tom Antony, FCA, the practicing CA who advises on the same problems every week.
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Regi Tom Antony, FCA — a practicing Chartered Accountant who advises NRIs, OCIs and returning founders on the same questions every week. Every page here is drawn from the book and live engagements, not stock copy.
Reviewed by Regi Tom Antony, FCA, who returned to India himself after around 20 years abroad and leads the NRI Come Back Plan at Regi Tom Antony & Associates: 250+ Come Back Plans in the last 10 years, covering RNOR timing, foreign pensions, Schedule FA, estate tax, FEMA, wills and family transition coaching.
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- NRI Tax Blueprint· Authored playbooks
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