yes, you are right, for small income , it is OK what you are saying , But you will have to pay CRA if you earn some thing like 50 Lacs or so in India & maintain Canadian Residency as Tax rate are higher in Canada. But you are right you will have to pay only the differnece not taxes 2 times. That is essense of any Double taxation tax treaty.
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Driller the thriller
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Originally posted by web2000
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Originally posted by desi_driller
Yes TK
You are right. If you still maintain Canadian Residency & Earn & Pay Taxes in any other country. Even you are covered under DTTA , you get foriegn tax credit for actual tax paid in your country of Emloyement. So, if you pay 20% Tax in India , you will get tax credit for 20% & Balance you will have to pay to Canada. It is same for all countries . On the other hand, if you if you pay ITax of 40% in India ( or any other Country), You will get all the credit to & you will pay no Tax in Canada but India will not refund your excess tax. So, basically , it is same everywhere, All countries are willing to suck you for Max. possible extent.
Let us take an example to understand clearly. Say I earn Rs. 450,000 (approx $10,000) and pay tax on Rs 300,000 (150,000 is tax deductible) which is Rs. X. Since there is almost no tax on $10,000 in Canada, will I be exempted from paying any tax in Canada?
If my earning is $20,000 (Rs 900,000) and I would owe $2000 to CRA had I earned that amount in Canada, I will still be exempted from tax as I already be paying more than $2000 (Rs 90,000) tax in India.
In my second example if I already paid $2000 or more on $20,000 amount in India, I don't think that I have to pay again $2000 in Canada. As long as you are staying in India, earning there and paying tax there then the chances of paying any tax in Canada is almost NIL because Canada has higher slab for tax rebate and if it is not the case then what is wrong in my above examples?
Is it correct what I understood?
I would say this is more or less correct what you have described. Good post.
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Originally posted by desi_driller
yes, you are right, for small income , it is OK what you are saying , But you will have to pay CRA if you earn some thing like 50 Lacs or so in India & maintain Canadian Residency as Tax rate are higher in Canada. But you are right you will have to pay only the differnece not taxes 2 times. That is essense of any Double taxation tax treaty.
I checked and found that Canada and India has almost same tax rates. If you earn $100,000 as your taxable income then in Canada you will owe $27600 approx and in India it will come out to be $27800 approx. In India you pay slightly more which means DTAA will most likely protect you. This is just an example without considering other tax benefits of your country of residence.
Posts: 2873
Location: Western Hemisphere
Posted on: 10-12-10 16:42:43
Location: Western Hemisphere
Posted on: 10-12-10 16:42:43
I only have fifth hand info here....so bear with me....
Didn't tax rates recently go up in India (within the last 1 to 4 months)? Meaning, earners at a lower income are being hit with a certain tax rate who were previously exempt from paying?
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Dimple2001
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Originally posted by dimple2001
I only have fifth hand info here....so bear with me....
Didn't tax rates recently go up in India (within the last 1 to 4 months)? Meaning, earners at a lower income are being hit with a certain tax rate who were previously exempt from paying?
The end result is that if you do the calculation you pay tax only in one country. The tax rates in both India and Canada are almost same.
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Originally posted by web2000
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Originally posted by desi_driller
yes, you are right, for small income , it is OK what you are saying , But you will have to pay CRA if you earn some thing like 50 Lacs or so in India & maintain Canadian Residency as Tax rate are higher in Canada. But you are right you will have to pay only the differnece not taxes 2 times. That is essense of any Double taxation tax treaty.
I checked and found that Canada and India has almost same tax rates. If you earn $100,000 as your taxable income then in Canada you will owe $27600 approx and in India it will come out to be $27800 approx. In India you pay slightly more which means DTAA will most likely protect you. This is just an example without considering other tax benefits of your country of residence.
I belive cad 27600. is only federal tax on top of that you have to pay provincial tax . for cad 100000 I belive it is around 12% that means you have to pay additional c $12000 tax.
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Originally posted by Val
Quote:
Originally posted by web2000
Quote:
Originally posted by desi_driller
yes, you are right, for small income , it is OK what you are saying , But you will have to pay CRA if you earn some thing like 50 Lacs or so in India & maintain Canadian Residency as Tax rate are higher in Canada. But you are right you will have to pay only the differnece not taxes 2 times. That is essense of any Double taxation tax treaty.
I checked and found that Canada and India has almost same tax rates. If you earn $100,000 as your taxable income then in Canada you will owe $27600 approx and in India it will come out to be $27800 approx. In India you pay slightly more which means DTAA will most likely protect you. This is just an example without considering other tax benefits of your country of residence.
I belive cad 27600. is only federal tax on top of that you have to pay provincial tax . for cad 100000 I belive it is around 12% that means you have to pay additional c $12000 tax.
$27600 is the total tax. There is no extra $12000.
After doing more research and playing with the numbers, I am sure that chances of paying double tax is almost NIL. So the person who is resident in India or Canada will pay tax only in one country. No double tax.
