I have a simple question regarding taxation:
1. Sent some funds to India and invested in FDs.
2. The tax was deducted at source on the interest received on FDs by the Indian bank.
3. Do I have to report the amount invested + interest on filing tax return in Canada. If yes, is there tax deduction here also.
The same question is for investment in NRE.
Hopefully this is useful to you or anyone else who stumbles upon this.
Generally speaking, if you are a resident of Canada for tax purposes, you must report income earned from anywhere in the world.
You do not have to report foreign property, unless it exceeds $100,000 at any time during the year.
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Madan Chartered Accountant team
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Quote:
Originally posted by hazelnut
I have a simple question regarding taxation:
1. Sent some funds to India and invested in FDs.
2. The tax was deducted at source on the interest received on FDs by the Indian bank.
3. Do I have to report the amount invested + interest on filing tax return in Canada. If yes, is there tax deduction here also.
The same question is for investment in NRE.
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Interest that you received needs to get adjusted for the period ending 31st of December of each year. Which means, if you deposited on 1st of April, your interest portion upto 31st of December of each year has to be reported, in this case, for the first year, it will be NINE Months of interest. (Pro rate it.)
Now to the tricky part, say, when you sent the money if the Dollar gave you 55 rupees and it is currently at 65 to a dollar, and you having lost 10 rupees on each, can claim the devaluation of the deposit and also claim a LOSS, if you know how, you can do it all by yourself. Also you can use the help of an accountant to help yoou with the calculations, while filing your tax return.
FH.
Good point about the interest, Full House.
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Madan Chartered Accountant team
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Location: Western Hemisphere
Posted on: 18-12-13 16:00:03
Quote:
Originally posted by Full House
Now to the tricky part, say, when you sent the money if the Dollar gave you 55 rupees and it is currently at 65 to a dollar, and you having lost 10 rupees on each, can claim the devaluation of the deposit and also claim a LOSS, if you know how, you can do it all by yourself. Also you can use the help of an accountant to help yoou with the calculations, while filing your tax return.
FH.
Bank of Canada publishes the average exchange rate at around Feb of each year for the past year. This is a one page document and has rates for several countries. If there has been multiple buy/sell transactions, it would be easier to use the average rate.
One can also track down the daily rates from BOC website and correlate to the buy/sell rate for that day....a more cumbersome route.
CRA website has a link to this information.
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Dimple2001
In addition to what dimple2001 said, make sure to keep documentation to provide proof for which exchange rates you used for the transactions. The CRA often asks for supporting documentation.
A PDF of the BOC average/spot exchange rates should be sufficient.
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Madan Chartered Accountant team
http://www.madanca.com" rel="nofollow">LINK
Thanks ..wanted to know how DT works , for Canadian citizens ( PIO or OCI ) , who are returning to India to work in India.
Not necessarily going back for good, but settling in India with a Canadian Citizenship and Passport, but maintaining Canadian citizenship and keeping the door open to come back to Canada if the need arises.
