Foreign Source Matching Program - CRA and Indian Tax Authorities

[bankub]

I entered Canada in 2011 on a work permit and got my PR in 2013. While on a work permit, I was continuously getting my savings/funds from UK into my local Canadian account as I had made up my mind to apply for PR. I finally got my PR in 2013 and bought a house with a chunk of my incoming foreign remittance/savings from UK.

In 2016, I got a notice from CRA under their " Foreign Source Matching Program" that in 2013 (when I became a PR - they did not mention the PR thing) I was holding funds in my UK account and that I did not declare the interest income on the savings. Hence, I was asked to pay interest which I did and the matter is now closed.

Recently, my father in India sold his property and gifted me some funds in my Indian savings account. I would like to get those funds into my Canadian account but I am not sure if CRA has a tie-up with INDIA under the 'Foreign Source Matching Program'. Earlier, CRA had accessed my bank account in UK and probably approached the relevant authorities to access the information. Canada has tie-ups with UK, USA, Australia, NZ etc.

If I wire funds from my Indian account to my Canadian account, would that raise a flag with CRA? Has there been any case where CRA has obtained information from Indian tax authorities? I know CRA cannot claim tax on gifted property funds but I want to do my homework and not leave any loose ends.

Please share your thoughts!.

 

[canuck_in_uk]

I entered Canada in 2011 on a work permit and got my PR in 2013. While on a work permit, I was continuously getting my savings/funds from UK into my local Canadian account as I had made up my mind to apply for PR. I finally got my PR in 2013 and bought a house with a chunk of my incoming foreign remittance/savings from UK.

In 2016, I got a notice from CRA under their " Foreign Source Matching Program" that in 2013 (when I became a PR - they did not mention the PR thing) I was holding funds in my UK account and that I did not declare the interest income on the savings. Hence, I was asked to pay interest which I did and the matter is now closed.

Recently, my father in India sold his property and gifted me some funds in my Indian savings account. I would like to get those funds into my Canadian account but I am not sure if CRA has a tie-up with INDIA under the 'Foreign Source Matching Program'. Earlier, CRA had accessed my bank account in UK and probably approached the relevant authorities to access the information. Canada has tie-ups with UK, USA, Australia, NZ etc.

If I wire funds from my Indian account to my Canadian account, would that raise a flag with CRA? Has there been any case where CRA has obtained information from Indian tax authorities? I know CRA cannot claim tax on gifted property funds but I want to do my homework and not leave any loose ends.

Please share your thoughts!.

In other words, how can you transfer the funds to Canada and avoid paying any tax on the interest income currently being earned on the funds in India?

This forum is not the place to ask how to commit fraud.

 

[bankub]

In other words, how can you transfer the funds to Canada and avoid paying any tax on the interest income currently being earned on the funds in India?

This forum is not the place to ask how to commit fraud.

Since there is no such thing as gift tax in Canada, most people show gift as a loan from relative and keep an Affidavit handy just in case.

I think you didn't quite understand my query.

 

[bankub]

In other words, how can you transfer the funds to Canada and avoid paying any tax on the interest income currently being earned on the funds in India?

This forum is not the place to ask how to commit fraud.

Also, I don't mind paying interest on that amount in Canada. But the thing is that I haven't been earning anything in India or had any savings till last year. So if I do declare that interest income, that would be only for one year. I want to avoid the hassle of CRA asking me un-necessary questions since I do not have any actual income in India.

 

[canuck_in_uk]

Since there is no such thing as gift tax in Canada, most people show gift as a loan from relative and keep an Affidavit handy just in case.

I think you didn't quite understand my query.

I understood.

Also, I don't mind paying interest on that amount in Canada. But the thing is that I haven't been earning anything in India or had any savings till last year. So if I do declare that interest income, that would be only for one year. I want to avoid the hassle of CRA asking me un-necessary questions since I do not have any actual income in India.

If you want to "avoid the hassle", then declare and pay taxes as you are legally required to.