Working from India on Canadian payroll max duration to avoid tax issues

[luck2021]

Hello,

I have been working from India for a Canadian employer on Canadian payroll since March 2021 (4 months). Had to come to India for personal reasons and got stuck here. My employer is aware of it and doesn't have issues per se but I wanted to understand the following

1) what's the max duration I can work on Canadian payroll from india without triggering any tax issues ?

2) Is this duration calculated per calendar year or India/Canada financial year ?

3) what are the tax implications if I overstay than allowed duration?

Any inputs will be highly appreciated.

Regards

 

[jclarke99]

Triggering tax issue for India or Canada?
What is your immigration/citizenship status in each country?

I don't know about the rules for India, but if you're a PR of Canada, I assume you are already paying and will continue to pay Canadian taxes.
To maintain Canadian PR status, you need to live physically in Canada for 2 years out of 5 years.

 

[canuck78]

Hello,

I have been working from India for a Canadian employer on Canadian payroll since March 2021 (4 months). Had to come to India for personal reasons and got stuck here. My employer is aware of it and doesn't have issues per se but I wanted to understand the following

1) what's the max duration I can work on Canadian payroll from india without triggering any tax issues ?

2) Is this duration calculated per calendar year or India/Canada financial year ?

3) what are the tax implications if I overstay than allowed duration?

Any inputs will be highly appreciated.

Regards

Whether you are a tax resident in Canada is determined by your ties to Canada not just your presence. It’s unclear whether you are trying to be a non-resident or a resident for tax purposes.

 

[luck2021]

Triggering tax issue for India or Canada?
What is your immigration/citizenship status in each country?

I don't know about the rules for India, but if you're a PR of Canada, I assume you are already paying and will continue to pay Canadian taxes.
To maintain Canadian PR status, you need to live physically in Canada for 2 years out of 5 years.

I am an Indian Citizen with Canada PR. Yes, I have been paying Canadian taxes. Wanted to know what are the tax implications if I stay more than 6 months in India on Canadian payroll. Will I become a tax resident of India and pay Indian taxes as well ?

 

[canuck78]

I am an Indian Citizen with Canada PR. Yes, I have been paying Canadian taxes. Wanted to know what are the tax implications if I stay more than 6 months in India on Canadian payroll. Will I become a tax resident of India and pay Indian taxes as well ?

What kind of ties do you have to Canada? Home, banking/credit cards that are active, etc.

 

[luck2021]

What kind of ties do you have to Canada? Home, banking/credit cards that are active, etc.

I don't own a home and car in Canada. Was living in rental accommodation (lease got expired recently). Do have bank accounts and credit card in Canada which are active but haven't used them since coming to India.

 

[canuck78]

I don't own a home and car in Canada. Was living in rental accommodation (lease got expired recently). Do have bank accounts and credit card in Canada which are active but haven't used them since coming to India.

Would call CRA to determine if you are still a Canadian tax resident if you remain in India over 6 months. Depending on their answer speak to your employer. You may need to reapply for healthcare when you return because you may not meet the RO to receive healthcare anymore. Valid PR card doesn’t mean you are still entitled to healthcare. You are actually supposed to advise the province of long absences partially to avoid fraud.

 

[lp89]

Hello,

I have been working from India for a Canadian employer on Canadian payroll since March 2021 (4 months). Had to come to India for personal reasons and got stuck here. My employer is aware of it and doesn't have issues per se but I wanted to understand the following

1) what's the max duration I can work on Canadian payroll from india without triggering any tax issues ?

2) Is this duration calculated per calendar year or India/Canada financial year ?

3) what are the tax implications if I overstay than allowed duration?

Any inputs will be highly appreciated.

Regards

Hi, I am a Canadian PR holder.

• Moved to India during the pendamic in July 2020.
• Still here till date.
• And still working for my Canadian employer.
• I am being payed into my Canadian Bank account, by a Canadian Employer and they are also deducting the income taxes in my payslips. So technically I am already employed in Canada and already paying taxes there.
• So.. I thought I am not eligible to pay taxes in India because I am not earning any income in India, from any Indian Employer, in my Indian bank account... So technically it makes me unemployed in India and I should be filling ZERO income tax return in India.

BUT I WAS WRONG!!

There is a thing called Double Taxation Treaty. So please read the following two articles and get in touch with a CA to avoid any confustions.

https://www.livemint.com/money/personal-finance/nris-working-from-india-need-to-keep-tax-implications-in-mind-11606408949009.html

https://www.indiafilings.com/learn/guide-to-double-taxation-treaty-in-india/

Also watch this video -

Regards

 

[canprofus]

Would call CRA to determine if you are still a Canadian tax resident if you remain in India over 6 months. Depending on their answer speak to your employer. You may need to reapply for healthcare when you return because you may not meet the RO to receive healthcare anymore. Valid PR card doesn’t mean you are still entitled to healthcare. You are actually supposed to advise the province of long absences partially to avoid fraud.

why are you posting completely irrelevant things to OPs situation mentioned in this thread? the question is what happens to taxes, but this looks like some highly negative blabbering on healthcare this that. also, why should someone call CRA for this? tax consultant is the right person to advise for this.

 

[canprofus]

Hello,

I have been working from India for a Canadian employer on Canadian payroll since March 2021 (4 months). Had to come to India for personal reasons and got stuck here. My employer is aware of it and doesn't have issues per se but I wanted to understand the following

1) what's the max duration I can work on Canadian payroll from india without triggering any tax issues ?

2) Is this duration calculated per calendar year or India/Canada financial year ?

3) what are the tax implications if I overstay than allowed duration?

Any inputs will be highly appreciated.

Regards

if you stay over 180 days, you need to file taxes in India. however since there is double taxation treaty, you can get credit for whatever you paid in Canada while filing taxes in India. you can reach out a CA and they can guide you on this if you end up staying more than 180 days between April 1 to March 30

 

[lp89]

why are you posting completely irrelevant things to OPs situation mentioned in this thread? the question is what happens to taxes, but this looks like some highly negative blabbering on healthcare this that. also, why should someone call CRA for this? tax consultant is the right person to advise for this.

why are you posting completely irrelevant things to OPs situation mentioned in this thread? the question is what happens to taxes, but this looks like some highly negative blabbering on healthcare this that. also, why should someone call CRA for this? tax consultant is the right person to advise for this.

@canuck78 has a point there.. I live in Vancouver, If you leave away from your province for more than 60 or 90 days then you are not covered for healthcare. (Obviously this rule is different for each state). I live in Vancouver so I have to stay in British Columbia for at least 6 months in a financial year to be eligible to receive state health benefits.

and If I am not living in BC for a long time then I must inform the authorities else its considered as fraud. Read this for details https://www2.gov.bc.ca/assets/gov/health/health-drug-coverage/medical-services-plan/leavingbc_brochure_web.pdf

 

[canprofus]

@canuck78 has a point there.. I live in Vancouver, If you leave away from your province for more than 60 or 90 days then you are not covered for healthcare. (Obviously this rule is different for each state). I live in Vancouver so I have to stay in British Columbia for at least 6 months in a financial year to be eligible to receive state health benefits.

and If I am not living in BC for a long time then I must inform the authorities else its considered as fraud. Read this for details https://www2.gov.bc.ca/assets/gov/health/health-drug-coverage/medical-services-plan/leavingbc_brochure_web.pdf

yes, but this thread is to check tax implications of staying out longer. OP is not asking what happens to his healthcare if he stays out longer time in India.

 

[canuck78]

yes, but this thread is to check tax implications of staying out longer. OP is not asking what happens to his healthcare if he stays out longer time in India.

Also commented on their tax residency status. Given the length of stay outside they may no longer be a tax resident of Canada. Many are unaware of the specific RO for healthcare and if staying over 6 months that also may be applicable.

 

[canuck78]

if you stay over 180 days, you need to file taxes in India. however since there is double taxation treaty, you can get credit for whatever you paid in Canada while filing taxes in India. you can reach out a CA and they can guide you on this if you end up staying more than 180 days between April 1 to March 30

If they aren’t a tax resident of Canada they would actually pay Indian taxes not Canadian which is why it is important to speak to CRA for them to determine their tax residency status.

 

[andrewvarghese]

Hi, I am a Canadian PR holder.

• Moved to India during the pendamic in July 2020.
• Still here till date.
• And still working for my Canadian employer.
• I am being payed into my Canadian Bank account, by a Canadian Employer and they are also deducting the income taxes in my payslips. So technically I am already employed in Canada and already paying taxes there.
• So.. I thought I am not eligible to pay taxes in India because I am not earning any income in India, from any Indian Employer, in my Indian bank account... So technically it makes me unemployed in India and I should be filling ZERO income tax return in India.

BUT I WAS WRONG!!

There is a thing called Double Taxation Treaty. So please read the following two articles and get in touch with a CA to avoid any confustions.

https://www.livemint.com/money/personal-finance/nris-working-from-india-need-to-keep-tax-implications-in-mind-11606408949009.html

https://www.indiafilings.com/learn/guide-to-double-taxation-treaty-in-india/

Also watch this video -

Regards

This only applies if you are also earning some income in India.

You then have to declare your combined worldwide income and are taxed in proportion in 1 country.

If you are earning Canadian dollars in a Canadian bank account and paying taxes on it and no other income, you are good to go. If you are transferring money from Canada to India, you might have to declare the inflow in India as income.