Foreign Fixed deposit Interest

[Aryan]

I have fixed Deposits worth ~100000K in India. I earn interest on them in India. Do I have to report this in Canadian income tax? If yes how?

[G-Hiotis]

Yes, as a Canadian resident you are taxed on your worldwide income. You need to report your interest income on your Canadian tax return, but you would be able to claim the foreign tax credit on any tax you paid to India. You need to be careful because Canada's tax year is the calendar year, but in India the tax year if from 1 April to 31 March.

Also, if the funds held abroad cost more than CAD 100,000 you may have to file Form T1135 on a timely basis (on or before April 30th in most cases).

[Aryan]

Yes I will be filling the T1135. And for the time offset I am looking at the interests deposit date to report that income. So basically any interests deposited in my indian accout from 1st jan 2021 to 31st dec 2021 should be reported here. Is this correct?

 

Are there any deductibles for foreign income for India and Canada tax treaty that I can use, other than tax paid in India?

BTW I will pay tax om these amounts when I file for tax return in India later so can I use that tax paid as a deductible for net year return file in Canada?