Hi
Can anybody advise me whether I should file my income tax return. I have become a landed immigrant in April 2003 and returned back to India after staying a week in Toronto. I got my PR and SIN Card through my friend. But I have not opened a bank account and I dont have a health card.
When I asked my friend about the tax return, he said that since I dont have a health card and bank account in canada, It is not necessary to file a tax return. Is it correct?
If I donot file the tax returns this year, will I be penalised when I go for tax returns in next year i.e., in 2005.
This year, I donot have any income also.

Can somebody advise on this?

Thanks and regards
Rama Swamy

Why you want to avoid filing taxes? If you have no income then there is nothing hide.

Anyway you can file taxes via online websites for free (as long as the income is less $CDN28,000 - I may be wrong about the number) and but you can't file electronically (e-file). So you have to print out the forms from those tax filing sites and mail them to CCRA.

Canada has a self assessment system, which means the onus in on you to assess your income and file your tax return. Secondly, Canada's income tax system treates the residency as the basis of filing income tax and once you are a resident of Canada ( which you are by way of becoming a landed immigrant) you are supposed to declare your \"world income\" and file your tax return. With \"world income\" the CCRA means whereever you have your income, you are supposed to declare that in your tax return and if it becomes taxable, then you have to pay tax on it. Canada has \"income tax treaties\" with most of the countries in the world to avoid double taxation but as far as I know, India is not in that category.

You should file your income tax return, even if it is a nil income as it has other benefits also. Only after filing your income tax return you become eligible for certain benefits like Child Tax Benefits & GST benefit etc. No, you will not be penalised for not filing the return since you do not owe them any tax but you will also be forgoing certain benefits as mentioned above.

More over, even if you had some income which was not taxable, you would not be penalized, but you will not get the RRSP room as calculated by CCRA based on your previous year income which helps you save and claim tax refunds in later years.

You can decide yourselves. I also hope that some \"tax professional\" would be able to show more light on it.

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Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada

I merely want to correct Mr Pramod Chopra- there IS a double taxation treaty agreement with India.As a matter of fact, both in India as well as in Canada,one is supposed to declare world income-which means all income earned or to be received in either country or ANYWHERE in the world is subject to tax.Most Indians generally do not declare Canadian income(either out of ignorance or deliberately,since apparently there is no foolproof way for Indian tax authorities to find out).However,anyone declaring the world income would get a rebated tax "in terms of the double taxation treaty" so that the ultimate tax is only on the local income earned.

Hope this answers your questions.

Sathish

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Sathish Subramanian
Email:

Thanks for the correction.

Yes Canada has a taxation treaty with India since 1997.

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Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada