Does India tax my income before Canada does?
In practice yes, and that is the defining feature of this corridor. India collects on Indian-source income by deducting at source, and the deduction is made before anyone has considered whether a treaty rate, an exemption or a lower withholding certificate applied. So the money is gone first and the position is argued afterwards. The reconciliation has two steps: settle what India was actually entitled to by filing there, then claim the Canadian credit for that amount. Claiming a Canadian credit for the whole deduction at source is the common error, because the credit follows what India was properly owed, not what it happened to take.
Tax was deducted at source in India, can I claim it in Canada?
Only to the extent India was entitled to keep it. Deduction at source is a collection mechanism, not a final assessment, and it is routinely more than the Indian liability on the same income, because it applies to a gross receipt rather than to a net amount and because a reduced treaty rate depends on paperwork that often arrives after the payment. So the order of work is to file in India, establish the real Indian liability, recover the excess there, and claim the Canadian credit on the settled figure. Claiming the whole deduction in Canada leaves you with a credit that can be denied on review and a refund in India nobody ever asked for.
Why do the Indian and Canadian tax years not line up?
Because the two countries define their fiscal years differently, and a credit has to be claimed in a Canadian year for tax paid in an Indian one. The consequence is real work rather than a technicality. One Indian year's tax straddles two Canadian years, the income has to be apportioned between them, and the Indian assessment that fixes the final figure often arrives after the Canadian return for the overlapping year is due. The usual handling is to file the Canadian return on a supportable figure, keep the Indian documents behind it, and amend once the Indian position is settled. Schedule that amendment when you file, because the alternative is remembering a year later.
Do I pay tax in India on rent from my flat there?
India taxes it first, because the property is there. Rent paid to a non-resident is typically collected by deduction at source, and the deduction is computed on the rent rather than on the rent less your costs, so it usually exceeds the tax actually due once interest, municipal charges, repairs and the statutory allowances are taken into account. Filing in India is how the difference comes back. Canada then taxes the same rental profit, computed under Canadian rules, and credits the Indian tax properly payable. The two profit figures will differ because the two systems allow different deductions, and that difference has to be explained rather than averaged away.
I inherited property in India, which country taxes it?
The inheritance itself and the income afterwards are separate questions, and the two countries treat them differently. What matters in practice is the value of the property when it came to you and the evidence behind that value, because it is the starting point for the gain on any later sale and the two countries will not necessarily accept the same figure. Rent from the property is Indian-source and taxed in India first. A later sale is taxed in India as well, again with tax collected from the proceeds. Canada taxes you on the same income and gain because you are resident there, crediting the Indian tax properly payable. Establish the value and the title position early.
Tax was deducted on my Indian deposits, was that correct?
Very often it is more than India was entitled to take. Deduction on interest paid to a non-resident is made at a rate set by domestic law, and the treaty rate that would apply instead depends on establishing your Canadian residence to the payer's satisfaction before the interest is credited, which with a bank or a deposit-holder frequently does not happen in time. There is a category question too: the same holding can produce interest, a distribution or a capital gain, and those are not deducted upon in the same way. Reconcile the deduction certificates against the account statements, file in India for the excess, and claim the Canadian credit on the settled figure.
What is Schedule FA and who has to complete it?
It is the foreign asset disclosure in an Indian return, and the trigger is residential status rather than income: a resident discloses foreign bank accounts, custodial and equity holdings, foreign life insurance with a cash value, immovable property and other assets held at any time in the year, plus any beneficial interest. A non-resident does not. The obligation is disclosure-based, so it applies to an account that earned nothing, and the penalties under the black-money legislation are what make it worth getting right. See Schedule FA reporting.
Do NRIs pay tax on money sent to India?
Sending your own funds to India is a transfer of capital, not income, so the remittance itself is not taxed. What is taxable is income the money then earns in India — interest, rent, capital gains — under the rules for the account type it sits in. Sending money out of India is the direction that needs certification before the bank will act. See NRE, NRO and FCNR accounts.
