Hey, where are the other tax experts?

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Dimple2001

One more question.
If any income is not taxable in India, will that be taxable in Canada?

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Originally posted by dimple2001

Hey, where are the other tax experts?

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Originally posted by web2000

One more question.
If any income is not taxable in India, will that be taxable in Canada?

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Dimple2001

Quote:

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Originally posted by dimple2001

Quote:

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Originally posted by web2000

One more question.
If any income is not taxable in India, will that be taxable in Canada?

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That would depend on nature of income and the terms of the treaty between Canada and India for that type of income. Won't be a fun reading.

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Originally posted by web2000

I am looking for information if Indian agricultural income is taxable in Canada or Not. This income is not taxable in India. Any quote from the internet and/or reference site will be much appreciated. I do not get any info from CRA site.

Thanks

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Dimple2001

Quote:

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Originally posted by dimple2001

Quote:

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Originally posted by web2000

I am looking for information if Indian agricultural income is taxable in Canada or Not. This income is not taxable in India. Any quote from the internet and/or reference site will be much appreciated. I do not get any info from CRA site.

Thanks

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Here is a link of the treaty terms.

http://www.treaty-accord.gc.ca/text-texte.asp?id=102409#top_of_page


As I said before, it is not a charming reading material. However, as you browse down, you'll see the following excerpt:

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III. TAXATION OF INCOME

ARTICLE 6

Income from Immovable Property

1. Income from immovable property (including income from agriculture or forestry) may be taxed in the Contracting State in which such property is situated.

2. For the purposes of this Agreement, the term “immovable property” shall be defined in accordance with the law and usage of the Contracting State in which the property in question is situated. The term shall in any case include property accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions of general law respecting landed property apply, usufruct of immovable property and rights to variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, sources and other natural resources; ships and aircraft shall not be regarded as immovable property.

3. The provisions of paragraph 1 shall apply to income derived from the direct use, letting, or use in any other form of immovable property.

4. The provisions of paragraphs 1 and 3 shall also apply to the income from immovable property of an enterprise and to income from immovable property used for the performance of independent personal services.

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How to clearly interpret the above ....I have no damn clue, especially when words like "may" and "might" come into play. But, I'll offer my interpretation in your case.

Contracting States mean Canada and India for the purpose of this treaty contract. So, per para 1, contracting state where the agri land is located may tax the income. In other words, India may tax the income. But, you already have said is not taxable.

Since there is no mention that this income will be taxed by the "other contracting State" (that would be Canada), I'll interpret this as something that does not need to be declared.

I think my interpretation might hold good since interest income and dividend income are taxed differently (see further articles in the treaty) and I don't see similar wording for immovable property.

I also do not see any mention of a resident of Canada being treated differently from resident of India in regards to this agri land income. So, I think, what I said above holds good.

Anyway, I think the big question that needs to be resolved.... is he tax resident of India or Canada? Because the terms of the treaty are based on the premise of that clear definition and therefore avoidance of double taxation.

You can also read terms of avoiding double taxation as you browse down the pages of the link.

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