Who this is for
People who moved from India to Canada in the last year or two. Permanent residents, work permit holders, students who have started working, and parents who came to join family. The same logic applies from any country.
The five questions
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When did Canadian tax residency start? For most people it is the day they arrived to live here with a home to go to. Not the date of the visa, not the date of the PR card. Write the date down. It goes on your first return and it decides everything else.
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What did you earn before and after that date? Income from India before the date is not taxed in Canada. We still ask for a figure, because it is used to calculate some credits and benefits in the first two years. Income from anywhere after the date is reported in Canada.
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What income continues in India? Rent from a flat, interest on NRO or NRE accounts and fixed deposits, mutual fund income, a pension, a late salary payment. Each goes on the Canadian return for the part of the year after your arrival, converted to Canadian dollars. NRE interest is usually not taxed in India; it is still income here.
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What tax did India take? Tax deducted at source on interest or rent, advance tax, or tax paid with an Indian return. Canada generally gives a credit for foreign tax paid on income you also report here, up to the Canadian tax on that income. The credit needs proof: Form 26AS, the Annual Information Statement, Form 16A certificates, challans.
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Is property outside Canada worth more than $100,000? Bank deposits, investments, rental property. If the total cost is over $100,000 Canadian at any time in a year, the T1135 form is required from your second year of residence. A home mainly for your own use is generally not counted. We check it every year.
One thing many people do not realize
You do not have to file the foreign property form, the T1135, for the year you became a resident of Canada. But that does not mean income from India is ignored that year. Rent, interest and other income from India after your arrival date goes on your Canadian return from day one. People mix up the two and either over-report or under-report their first year.
What to prepare
- Your arrival date and immigration document
- Your SIN
- Form 26AS or the Annual Information Statement for the Indian financial year
- Interest certificates for Indian bank accounts
- Rent records and expenses for Indian property
- Form 16 or pension statements
- A rough list of what you own outside Canada and its value when you arrived
When professional help may make sense
A property sale in India in the year you moved. A business in India. Trust or inheritance matters. An arrival date that is not clear-cut. These need individual attention.
How Rex Tax may be able to help
We prepare first-year returns for newcomers from India and claim the foreign tax credit where the rules allow. We check the T1135 position and explain what to collect for next year. Our guide on income from India lists every document by type.
From the Rex Tax desk
The document that solves the most problems is the Indian tax statement, Form 26AS or the Annual Information Statement. It shows income reported against your PAN and tax deducted at source in one place. Download it before the appointment. Without it, Indian interest and TDS have to be rebuilt from bank statements.
Official sources
- CRA: Newcomers to Canada
- CRA: Questions and answers about Form T1135
- CRA: Federal foreign tax credit (line 40500)
This guide is general information, not advice about your situation. It reflects the rules for the 2025 and 2026 tax years. It has not yet been reviewed by a practitioner. The information was checked against the official sources listed above on the date shown. Rules change. Check the official sources above or ask us. How we prepare these guides.