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Originally posted by adamthorat

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.

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It depends on what doors you are leaving open. If you keep your driver's license, health card, a home, etc, you will be treated as a Canadian tax resident. If you are leaving retirement accounts, but close everything else, you may be deemed a non-resident for tax purposes. There is no simple answer other than the fact you will be a non-resident if you close all ties to Canada - credit cards, bank accounts, ID documents (excluding passport, citizenship card), home, apartments, etc, etc, etc.

On the topic of taxation, Canada will allow foreign tax credit for the taxes you have paid on your income in India, if you are considered a Canadian tax resident. This will offset any tax you may owe while declaring worldwide earnings. Again, what I have stated is in its utter simplicity and a number of other factors will come into play.