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  Canada Immigration Forum > About Canada > Financial Planning > Investing in Fixed Deposit in India at 8 - 10 % Annual Percentage Rate
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Investing in Fixed Deposit in India at 8 - 10 % Annual Percentage Rate




Hi There,

One of my friend recently mentioned that he has borrowed money from Canada at 1.9 % APR and is investing it at 8- 10 % APR in India.

Has anyone esle done such thing?

I am bit unclear on how it will workout for tax purpose and what sort of forms I need to complete in India and in Canada to make such thing happen.

My friend believes that the gains will only be taxed in India and there is nothing to fill out in either country at the time of investment. I am bit surprised and uncomfortable with the response.

I will greatly appreciate if anyone can share some more light and their expereince.

Many Thanks,
JP


 
Last edited by: JP_Edmonton on 05-06-11 18:37:58
JP_Edmonton

Junior Desi
Member since: Jun 11
Posts: 20
Location:

Post ID: 183503 05-06-11 12:56:32
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ashedfc
Senior Desi
Member since: Jun 10




Posts: 2153
Location: GTA


There are reasons, why the interest rates are very high in India.
Mentioning the list of reasons & their explanation, is beyond the scope of this blog. As an investor, one has to evaluate & make up his/her own mind...
1. The existing inflation figures & the projected future inflation in the base currency economy.
2. The future valuation of Rs vs any other currency.
3. The ability of the Govt. to manage its currency.

As a guide: Look at the past experience, its an indication of future..


 
Post ID: 183504 05-06-11 15:09:49
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JP_Edmonton
Junior Desi
Member since: Jun 11




Posts: 20
Location:


Thanks for your reply. I agree with your answer and explanation on reasons why the interest rate is high. However, assume if I am not going to convert the currency after 10 years and would like to continue to either reinvest or use it in India itself. Regardless of the conversion issue, my key question is to find out if this can be done while I am in Canada and if yes, what does it take to make it happen?

Thanks again for your help and further clarification.

JP


 
Post ID: 183506 05-06-11 18:45:51
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Nightmare
Senior Desi
Member since: Apr 06




Posts: 1170
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Canadian citizen is subject to tax on his world wide income. With information exchange treaty likely in couple of years, you might get caught. It si not worth it. Better keep money in Canada. If Kangress is reelected, India would become a basket case like Greece in next 10 years due to very high public debt. Fruther, China would have ruined India by then. I would better hold Chinese currency if my horizon is 10 years.

 
Post ID: 183512 05-06-11 23:22:01
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JP_Edmonton
Junior Desi
Member since: Jun 11




Posts: 20
Location:


Hi All,

Thanks for your help and advice. I wanted to share some additional information I managed to get from a bank clerk in India.

The person I spoke to told me that if I invest in India, where the interest gained on deposit is > Rs. 10,000, the Gov. will deduct 10 % of the interest at source. The person I spoke to told me that because the income is taxed in India, under dual taxation law, it should not be taxed again in Canada.

Please share any other details or information you may have in this matter.

Many Thanks
JP


 
Post ID: 183523 06-06-11 11:55:31
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rajcanadaMember of Administrators
Admin
Member since: Jul 03




Posts: 2707
Location: Kitchener, ON


The above interest rates are for Indian citizens, resident in India.
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Post ID: 183530 06-06-11 14:25:14
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