Doubts on Filing our Tax Returns

[Paradise]

Hi,

I became permanent resident last year in July 2023 under parental category. I completed my landing formalities and collected my PR card and returned to India as I am still working in India and will be retiring in few months.

I have plans to settle in Canada beginning of next year after my retirement . As per my son's advice I did declare my income earned in India for the year 2023 and filed my Tax returns in Canada, I do pay my tax in India as well.

I have a doubt, do i need to declare my retirement benefits that I would be getting in India while filing my 2024 tax returns? I understand I need to show the income earned in 2024, but what about my retirement perks as that's my retirement benefit for the number of years I have put in on employment in India and as per Indian laws the PF is not taxable and also part of gratuity is not taxable. My worry is that if I happen to declare while filing for Tax returns will I be taxed.

I do not have any plans to invest the retirement money in Canada.

Request your help in clearing this doubt.

Regards,

 

[armoured]

Hi,

I became permanent resident last year in July 2023 under parental category. I completed my landing formalities and collected my PR card and returned to India as I am still working in India and will be retiring in few months.

I have plans to settle in Canada beginning of next year after my retirement . As per my son's advice I did declare my income earned in India for the year 2023 and filed my Tax returns in Canada, I do pay my tax in India as well.

I have a doubt, do i need to declare my retirement benefits that I would be getting in India while filing my 2024 tax returns? I understand I need to show the income earned in 2024, but what about my retirement perks as that's my retirement benefit for the number of years I have put in on employment in India and as per Indian laws the PF is not taxable and also part of gratuity is not taxable. My worry is that if I happen to declare while filing for Tax returns will I be taxed.

I do not have any plans to invest the retirement money in Canada.

Request your help in clearing this doubt.

Regards,

I strongly suggest you consult a tax accountant. First, I don't believe you needed to file in 2023, and if you do not return to Canada before 2025, then for 2024 either. (I do hope you haven't been receiving benefits of a Canadian resident while living abroad)

BUT: on an ongoing basis you WILL need to declare all of your worldwide income, including retirement benefits. Now, it is possible in some cases, eg for countries with dual taxation treaties, that some of that won't count as regular income - I don't know; but generally retirement income in Canada is taxable. You need to speak to a tax professional about that. There are deductions and so this doesn't necessarily mean a lot of tax payable, but you should look into it in advance.

(You won't need to pay taxes on income before your date of 'arrival' for permanent settlement in Canada. You may need to declare income in previous periods for purposes of certain benefits)

There is also a procedure for declaring your worldwide assets and their value at time of arrival; this can be important as you may have to pay capital gains on disposal of those assets.

None of this is necessarily that complicated or onerous but you should make use of a professional to avoid surprises.

 

[canuck78]

Hi,

I became permanent resident last year in July 2023 under parental category. I completed my landing formalities and collected my PR card and returned to India as I am still working in India and will be retiring in few months.

I have plans to settle in Canada beginning of next year after my retirement . As per my son's advice I did declare my income earned in India for the year 2023 and filed my Tax returns in Canada, I do pay my tax in India as well.

I have a doubt, do i need to declare my retirement benefits that I would be getting in India while filing my 2024 tax returns? I understand I need to show the income earned in 2024, but what about my retirement perks as that's my retirement benefit for the number of years I have put in on employment in India and as per Indian laws the PF is not taxable and also part of gratuity is not taxable. My worry is that if I happen to declare while filing for Tax returns will I be taxed.

I do not have any plans to invest the retirement money in Canada.

Request your help in clearing this doubt.

Regards,

Assume you filed taxes as anon-resident.you didn’t need to file but since you did it must be as a non-resident. You have to look at tax treaties between India and Canada but given you will benefit from access to services in Canada it doesn’t seem unrealistic to have to pay some tax on your retirement income like most Canadians do.