What to do with RRSP? Need advice
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Posted on: 15-11-11 16:53:57
Quote:So what you are saying is that as long as the entire RRSP is in cash (i.e. not generating any income), there will be no taxes due in India?
Originally posted by vikshr
For Indian tax purposes, your withdrawal from RRSP doest trigger Taxable event.... What indian tax system cares for is "what you earned during the year" (i.e. income within your RRSP).... remember, earnings inside RRSP is protected from Canadian taxes not from Indian taxes......
What is the difference between someone withdrawing cash from RRSP vs. converting it into a RRIF annuity and receiving the monthly payments?
From Canadian tax perspective, both of those types of "income" are treated equally.
But you are saying that in the first case, India won't tax and in the second case, they will?
If so, KumarM should revert his RRSP to an all cash position and withdraw $5K every year to minimize taxes all round?
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"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."
-- Rhett Butler in "Gone with the Wind"
Quote:
Originally posted by pratickm
Quote:So what you are saying is that as long as the entire RRSP is in cash (i.e. not generating any income), there will be no taxes due in India?
Originally posted by vikshr
For Indian tax purposes, your withdrawal from RRSP doest trigger Taxable event.... What indian tax system cares for is "what you earned during the year" (i.e. income within your RRSP).... remember, earnings inside RRSP is protected from Canadian taxes not from Indian taxes......
Thats right... If your RRSP doesnt generate income, there will be no tax in india.
Quote:
Originally posted by pratickm
What is the difference between someone withdrawing cash from RRSP vs. converting it into a RRIF annuity and receiving the monthly payments?
From Canadian tax perspective, both of those types of "income" are treated equally.
But you are saying that in the first case, India won't tax and in the second case, they will?
Where did i say that "in the second case they will"?
I think you are confusing yourself by putting too much emphasis on Withdrawals.... RRIF is no different....
Like some other user mentioned before.... "rrsp withdrawals" are not technically income of that year..... that is an income of previous years which Canadian system has not been taxing all along.... How can Indian system tax your income for the year say 1995 in the year 2011?
In short:
- Your RRSP generates income in the year 2011. This income is not taxed in Canada (until withdrawn). But this income is taxed in India.
- You withdraw from RRSP. This withdrawal is taxed in Canada but not in India.
Hope that clarifies......
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Vik
Quote:Because you said any income generated by the RRSP will be taxed in India.
Originally posted by vikshr
Where did i say that "in the second case they will"?
If I convert my RRSP into RRIF and receive monthly payments from it via an annuity, won't that qualify as income (for Indian taxes)?
Why is there this difference between income generated within an RRSP (taxable by India) and income generated via a RRIF (not taxed?)
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"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."
-- Rhett Butler in "Gone with the Wind"
Quote:
Originally posted by pratickm
Quote:Because you said any income generated by the RRSP will be taxed in India.
Originally posted by vikshr
Where did i say that "in the second case they will"?
If I convert my RRSP into RRIF and receive monthly payments from it via an annuity, won't that qualify as income (for Indian taxes)?
Why is there this difference between income generated within an RRSP (taxable by India) and income generated via a RRIF (not taxed?)
Pratickm,
I will let you figure it yourself.... i have full faith you have capability to find answers...... I think I was clear enough in my previous posts, but i guess you do not want to agree and thats okay with me.....I just do not have time and desire to answer endless questions....
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Vik
Dude, I wasn't disagreeing, just asking questions to clarify something I didn't know.
If you don't have time, it's fine, don't bother.
I think the OP has got his answer by now.
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"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."
-- Rhett Butler in "Gone with the Wind"
Quote:
Originally posted by vikshr
- Your RRSP generates income in the year 2011. This income is not taxed in Canada (until withdrawn). But this income is taxed in India.
- You withdraw from RRSP. This withdrawal is taxed in Canada but not in India.
That's right. As per my auditor here, I am taxed on income in India. The RRSP witholding (TDS) in Canada is used towards the total income in Canada.
Quote:
Originally posted by KumarM
Quote:
Originally posted by vikshr
- Your RRSP generates income in the year 2011. This income is not taxed in Canada (until withdrawn). But this income is taxed in India.
- You withdraw from RRSP. This withdrawal is taxed in Canada but not in India.
That's right. As per my auditor here, I am taxed on income in India. The RRSP witholding (TDS) in Canada is used towards the total income in Canada.
Since you paid TDS on your RRSP withdrawals which will be refunded back. As per your auditor, is RRSP withdrawals gets added to your Indian income or not?
