Canada: the NRI investment guide

For Canada-resident NRIs the story is different from the Gulf guides in this series — and it's better to hear it straight: there is no "0% in India" here. The India–Canada treaty leaves capital gains to India's domestic law, so India taxes your Indian gains fully, Canada taxes your worldwide income, and the relief is a foreign tax credit, not an exemption. The treaty's one genuine win is NRO interest, capped at 15% instead of 30% — its dividend article, like the US treaty's, gives individuals nothing. The real work for a Canada-based investor is coordination: T1135 reporting, the 50% inclusion rate that shapes how credits land, and the fact that India-tax-free is not Canada-tax-free. This guide covers all of it.

At a glance

You can test every number above against your own figures in the DTAA tax visualizer — select Canada and switch between the income tabs.

Your India tax position, income by income

Mutual fund units. The India–Canada treaty has no residual-clause story: Article 13(2) lets India tax capital gains under its domestic law, so India taxes your unit gains at the normal NRI rates — the same numbers the visualizer shows for the domestic route. Canada then taxes the same gain as part of your worldwide income — but only 50% of a capital gain enters Canadian income (the inclusion rate), and the foreign tax credit for Indian tax is limited to the Canadian tax on that included half. In practice this means Indian tax can exceed the available credit; the coordination between your Indian and Canadian filings is where the money is, and worth a Canadian preparer's attention from year one.

Direct stocks and PMS. The same position applies: taxable in India at domestic rates, taxable in Canada with the FTC and the 50% inclusion mechanics above. Unlike the US, Canada has no PFIC-style default regime punishing ordinary foreign fund holdings, so the fund-versus-PMS choice is less about home-side classification and more about the Indian-side differences covered in the PMS article — though Canada does have offshore anti-avoidance rules at the margins, which a Canadian adviser can confirm don't apply to a plain portfolio.

Dividends and interest. A misread number first: the treaty's 15% dividend rate is for companies controlling 10%+ voting power — individuals face a 25% cap, which is worse than the 20% domestic TDS, so the domestic rate simply applies (Section 90(2) lets you use whichever is lower). Interest is the treaty's genuine gift: capped at 15% instead of 30% on NRO balances. And the Canada-specific trap on NRE interest: it's exempt in India under Section 10(4)(ii) — but that exemption is Indian law only. As a Canadian resident you owe Canadian tax on it as it accrues; "tax-free NRE interest" is a phrase that does not survive a Canadian tax return.

Claiming what the treaty gives: the CRA certificate

The treaty benefit worth claiming — the 15% interest cap — still runs through the standard machinery. The Canadian TRC is the CRA certificate of residency, requested from the Canada Revenue Agency (processing takes weeks — apply well before your bank needs it). With the certificate in hand, file Form 10F on the Indian portal for the financial year and share both with your bank so the 15% rate applies at source. On the Canadian side, Indian taxes paid are claimed as a foreign tax credit on Form T2209 — note that India's April–March financial year and Canada's calendar tax year don't line up, so credit timing deserves attention from your preparer.

Accounts, disclosure & paperwork

The base kit is the same as any NRI — an NRE and/or NRO account, KYC, and the FATCA/CRS self-certification — and Canada participates in CRS, so your Indian account data flows to the CRA; keep your declared residence and filings aligned. Like the US, AMC acceptance varies for Canada-resident investors: some fund houses restrict them, others accept with additional declarations, so the practical fund menu is worth checking before planning. On the Canadian side, the workhorse is Form T1135: specified foreign property — Indian funds, shares and deposits included — over CAD 100,000 in total cost must be reported annually, with meaningful penalties for missed filings. Typical Indian onboarding documents: passport, Canadian PR card or visa details, overseas address proof, PAN, and a photograph; the NRI desk confirms the exact checklist per institution.

Routes available from Canada