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  Canada Immigration Forum > About Canada > Accounting and Taxation > Tax related query - Please suggest
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Tax related query - Please suggest




Hi

I have a tax related query:

- Do I have to declare sale of property (inherited) in India and how much I sold it for, while filing my taxes in Canada? Do I have to notify CRA?

Note: I have already paid the capital gains tax to the Indian IT Deptt.

Thnx

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sumjo

 
sumjo

Senior Desi
Member since: Jun 04
Posts: 351
Location: Mississauga

Post ID: 236931 29-03-18 11:59:41
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MITRON
Senior Desi
Member since: Sep 17




Posts: 154
Location:


Nope. You don't.

There is NO inheritance tax and Gift tax in Canada.

Keep all the documents handy though - like Wills, Death Certificate, Indian IT taxes certificate, Indian CA documents.

If & when you bring the money into Canada via International wire transfer , your Canadian bank might ask you to bring the documents in - just to make sure no money laundering & hanky panky stuff is going on. They have to report it to FINTRAC.

If you bring the money in, in small installments over a period of time, you won't even have to do that.

Keep the money in India, you can get 8 % - 9 % interest in FD etc. Here you will barely get 1 % - 2 %.

Plus CAD $ is not really going up against INR, so you don't have to worry about exchange rate devaluing your Indian Rs.

I am seeing 1 CAD at Rs. 50 for a while now, don't think that's going to change. In fact I see Rupee getting stronger in coming years.


 
Post ID: 236933 29-03-18 15:22:57
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Full House
Senior Desi
Member since: Oct 12




Posts: 2414
Location:

Senor, you MISSED THE BUS.

Let me provide you with a scenario and then explain as to how it gets done there in India. You will have to see if it applies to you.. and ask the Accountant who did ALL of the Calculations and Accounting for you and get to know HOW they arrived at the CAPITAL GAINS in that account and HOW MUCH you paid to the Indian Revenue Services.

Now I will give you a continuation of the Scenario for your case, who is currently residing here in Canada..:

SAY..: You Got Into Canada in the year 2000 AD., and at that time the property belonged to some one else who later on BEQUEATHED it to you and also to some one else. In this case, YOU DO NOT HAVE TO REPORT this as your property at the time of ENTRY INTO CANADA. BUT.. there is always a BUTT, if you had already inherited it on the date of entry, then, say its value was less than CAD$100,000.00., then you are with in your rights not declaring the same. BUTT remember that the VALUE of the property as of the day of landing needs to get DECIDED according to the CRA., and it is called by them as: DEEMED DISPOSITION, value.

Say the Deemed Disposition value is the value of your share, if it was split between the parties that inherited., then say it was Rs.45 Lakhs or $90,000CAD, then once again they will have to know if and when you sold the Property or your share (of the property), if it did bring in, say $90,000 CAD or less, it is O.K. too. If it is LESS, then, You had a LOSS upon the sale of the share/property. Then you pay NO TAX TO CRA. If it is more than the Value of 'deemed disposition',(Value on the date of your entry into Canada) then, they will ask for additional amount to be paid to them. This is regardless of what you paid as Capital gains there in India. (More on it under this.)

In India, when they calculate the Capital Gains, they take into account the factor of Cost of Living Allowance into Account. Then they wipe out or ADJUST the gains there on those calculations and then ask you to pay the TAXES on the gains..ONLY IF YOU WANT TO CLEAR IT OUT OF INDIA. If you want to retain the same there, you have (YOU DID THEN) an option to reinvest the same OR the Capital gains portion into other SHELTERS and avoid paying the taxes on it IMMEDIATELY. Now that you say that you did pay the tax upon the Capital gains, you MISSED THE BUS. But you being an NRI and also a Canadian (may be) you can now swing the same into NRE a/c, FCNR Account that is, and as mentioned in the previous post, you can get a better rate of return there, and investing the same in a suitable vehicle, retaining the balance of the sale proceeds, same there, in India and trickle it into Canada periodically, when ever you want it here.

There are other posts there in this CD, where in I have given similar point of views to others. You did not ask us earlier, nor did you get to see the previous posts in there, by googling the CD web site and hence you lost a lot of good money, unnecessarily. Sorry, to say it once again and you MISSED THE BUS there too.

Now to help you..: If you can determine the Value of the property, if you had the share of it, on the day of entering into Canada, and since you know the value on the sale date, and if it was lower than the value on the date of entry, then, you can find the gain/loss too, and declare the same on your NEXT Years's Taxation as a Gain/Loss.. as the case may be and adjust your taxes accordingly. There are good accountants there in India who will work wonders for you, if you contact them and tell them the full story or provide them with a copy of this post to them to work with, and will do the trick for you.

Hope this is "As clear as MUD".

Now, ask away your questions under this.


FH.

----
Quote:
Originally posted by sumjo

Hi

I have a tax related query:

- Do I have to declare sale of property (inherited) in India and how much I sold it for, while filing my taxes in Canada? Do I have to notify CRA?

Note: I have already paid the capital gains tax to the Indian IT Deptt.

Thnx





 
Last edited by: Full House on 30-03-18 00:30:14
Post ID: 236937 30-03-18 00:27:15
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Many
Senior Desi
Member since: May 13




Posts: 109
Location:


FH and Mitron have replied to your query in good detail.
My comment is for the capital gains part: depending on your age/status example one may be retired, then one does not want hassles of retaining money in India and managing that money; rather one may prefer getting all the funds out(paying cap. gains) and into your new home Canada. So all belongings in one place, easier to handle!

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Many

 
Post ID: 236943 30-03-18 23:53:06
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MITRON
Senior Desi
Member since: Sep 17




Posts: 154
Location:


Someone I know got $ 300,000 CAD in one shot from a inheritance sale of property into Canada from India, via International Bank Wire Transfer.

He sent the money from ICICI bank in India, after filling some forms, Indian CA certificate, Income Tax clearance etc etc. Some formalities & technicalities, the bank & CA handled everything. Very smooth process, everything was done in a day.

His bank in Canada was BMO.

Next day at 7.30 AM he got a call from BMO asking him a few questions about whether he knew big amount money has been deposited in his BMO account & where it came from etc. He was just asked to come in with a few documents at his home branch ( main branch ) & they released the money, the same day.

When he went there with the documents they just took a photo copy of it & barely looked at them.

Then they started selling him some investments like Mutual Funds, GIC & stocks etc, he told them to get lost and lied to them that he needs the $ 300,000 for a down payment on a new house :clap:

BMO didn't really care about how the money came or whatever, they just wanted him to physically come in, so they could pressurize him & up sell him some investments. The bank manager & some stupid Financial Advisor was sitting there trying to sell him something, when they saw the big amount in his checking account.


 
Post ID: 236952 31-03-18 22:29:48
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sumjo
Senior Desi
Member since: Jun 04




Posts: 351
Location: Mississauga


Thanks Everyone!

For money transfer from India to here, I will be using ICICI where I have a NRE/NRO acc.
Now, when the funds ultimately comes in via wire transfer, what all documents am I supposed to furnish to the Canadian bank or the CRA?

I have:
- The Sale Deed
- ICICI bank statement showing the funds being deposited in the NRO acc by DD
- Accounting related documents signed by the CA (work-in-progress)

Anything else that I might need to show to the bank here?

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sumjo

 
Post ID: 236965 02-04-18 17:49:29
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Many
Senior Desi
Member since: May 13




Posts: 109
Location:


Besides the docs you mention, hang-on to the TDS certificate which would be useful in India and could be useful here.
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Many

 
Post ID: 236967 02-04-18 22:34:30
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MITRON
Senior Desi
Member since: Sep 17




Posts: 154
Location:


Quote:
Originally posted by sumjo

Thanks Everyone!

For money transfer from India to here, I will be using ICICI where I have a NRE/NRO acc.
Now, when the funds ultimately comes in via wire transfer, what all documents am I supposed to furnish to the Canadian bank or the CRA?

I have:
- The Sale Deed
- ICICI bank statement showing the funds being deposited in the NRO acc by DD
- Accounting related documents signed by the CA (work-in-progress)

Anything else that I might need to show to the bank here?



1. Death Certificate
2. The WILL

If you have any of the above.

Its all a formality & technicality. The Canadian bank might or might not ask for the above. They just want to make sure its not some money laundering & drug money that's all. They just want to know if the source of the money is legitimate or not, that's all, no big deal.

Plus as I said their eyes light up, when they see a big amount and they just want to bring you in & try to Up Sell you some of their own stocks, investments, mutual funds etc, so ask them to get lost. Tell them you need the money for a down payment that's all for some house, so they don't pester you.

Any Financial transactions above $ 10,000 ( Usually cash transactions ) they have to report to FINTRAC.

No need to report this money or transaction to CRA or to show it when you file your Canadian tax return with CRA.

But any money you make from this inheritance money after it comes to Canada like stocks, Mutual Funds, Savings account & GIC interest money, you will have to show in later years as Capital gains, Investment income, Interest income etc.

But this first time inheritance money you bring into Canada you don't have to show anything to CRA as there is NO inheritance or gift tax in Canada.


 
Post ID: 236968 03-04-18 01:56:55
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MITRON
Senior Desi
Member since: Sep 17




Posts: 154
Location:


Be careful with ICICI they will easily make 3 % to 4 % on the exchange rate, when you transfer the money over here.

Plus the Canadian bank will charge you some nominal fee like $ 20 CAD for an incoming international wire transfer usually through the SWIFT code, but the Canadian bank won't charge any exchange rate or FOREX fees on it.


 
Post ID: 236969 03-04-18 02:00:54
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sumjo
Senior Desi
Member since: Jun 04




Posts: 351
Location: Mississauga


Yes, I have both the documents, as mentioned below.

For ICICI, there is nothing much that I can do in terms of the exchange rate....negotiate for a better rate...yes, off course, but still at the end of the day, they WILL make money out of it, whether I like it or not!!

Thanks!

Quote:
Originally posted by MITRON

Quote:
Originally posted by sumjo

Thanks Everyone!

For money transfer from India to here, I will be using ICICI where I have a NRE/NRO acc.
Now, when the funds ultimately comes in via wire transfer, what all documents am I supposed to furnish to the Canadian bank or the CRA?

I have:
- The Sale Deed
- ICICI bank statement showing the funds being deposited in the NRO acc by DD
- Accounting related documents signed by the CA (work-in-progress)

Anything else that I might need to show to the bank here?



1. Death Certificate
2. The WILL

If you have any of the above.

Its all a formality & technicality. The Canadian bank might or might not ask for the above. They just want to make sure its not some money laundering & drug money that's all. They just want to know if the source of the money is legitimate or not, that's all, no big deal.

Plus as I said their eyes light up, when they see a big amount and they just want to bring you in & try to Up Sell you some of their own stocks, investments, mutual funds etc, so ask them to get lost. Tell them you need the money for a down payment that's all for some house, so they don't pester you.

Any Financial transactions above $ 10,000 ( Usually cash transactions ) they have to report to FINTRAC.

No need to report this money or transaction to CRA or to show it when you file your Canadian tax return with CRA.

But any money you make from this inheritance money after it comes to Canada like stocks, Mutual Funds, Savings account & GIC interest money, you will have to show in later years as Capital gains, Investment income, Interest income etc.

But this first time inheritance money you bring into Canada you don't have to show anything to CRA as there is NO inheritance or gift tax in Canada.



:( :(

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sumjo

 
Post ID: 236972 03-04-18 12:31:51
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Contributors:
Full House(1)  Many(3)  MITRON(5)  rajcanada(1)  sumjo(6)  
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