Posted on: 24-10-08 12:30:38
Quote:
Originally posted by jonav
Hi, I've a question on the 7% earned, won't we loose on exchange rate volatility? The CAD to INR was INR 43 few days ago and today it is INR 39. One can only make money if CAD falls against INR but if it becomes stronger while repatriating the interest earned on INR won't be able to offset. I would request all CD finance gurus to enlighten us on this.
There is one more type of account, FCNR. The accounts are in foreign currency of your choice, we can keep it in CAD which has a 5.05% rate of interest. Fully repatriable and interest earned is tax free in India, one question here, will this mean we pay tax in Canada on the interest earned?
Can someone assist in this?
Thanks……Jona
FCNR can be maintained in foreign currency and are the interest earned is tax free ...... since this income was earned in India and if you file an Income Tax return in India (even with zero income ) I am not sure if the CRA will give you any benefit on tax paid in another country on the income earned there ..... and you might have to pay taxes in Canada .
NRE accounts though convertible to INR are repartriable ..... but you are right that the interest earned may be offset by the exchanges and changes in currency if short term is concerned ......
Thats why they say that keeping USDs in cupboards is better than investing in INRs ......... imagine if someone had invested USD s in India 6 months back ........... incidentally I was one of them .......
NRO a/c is non repartriable ie mioney goes into the Indian market and cannot be freely repartriated in foreign currency .
-----------------------------------------------------------------
Fido.
Quote:
Originally posted by jonav
There is one more type of account, FCNR. The accounts are in foreign currency of your choice, we can keep it in CAD which has a 5.05% rate of interest. Fully repatriable and interest earned is tax free in India, one question here, will this mean we pay tax in Canada on the interest earned?
Can someone assist in this?
Thanks……Jona
Yes, lawfully, you will be taxed in Canada if you are considered a tax resident in Canada.
Canada taxes world income, whereever or however received.
-----------------------------------------------------------------
Chandresh
Advice is free – lessons I charge for!!
