T1135 for India Assets: How Canadian Residents Report Indian Property

T1135 for India assets is the question almost every Indian-born Canadian resident reaches sooner or later: the NRO account, the fixed deposits, the mutual funds, the inherited plot and the flat rented out in Pune all count toward one Canadian foreign property test. Form T1135, the Foreign Income Verification Statement, must be filed by Canadian resident individuals, corporations and certain trusts that own specified foreign property costing more than C$100,000 at any time in the year. This guide shows how to classify Indian assets, which Part of the form to use and what to do if you missed past years. It is written for residents of Brampton, Surrey, Edmonton, Ottawa and other Canadian cities who still hold property in India.

Which Indian assets count for T1135 for India assets?

The CRA lists specified foreign property to include funds held outside Canada, tangible property outside Canada, shares of non-resident corporations, debts owed by non-residents, interests in foreign insurance policies and precious metals held outside Canada. Mapping common Indian holdings:

How do you decide whether to file step by step?

1. List every non-Canadian asset you own, in India and elsewhere, with date acquired and cost.
2. Remove excluded items: personal-use property, assets used only in an active business, and foreign affiliate shares.
3. Add up the cost in Canadian dollars for each date during the year. If the total exceeded C$100,000 at any time, you file.
4. Choose Part A or Part B. Part A is for total cost over C$100,000 but under C$250,000 throughout the year, where you tick the types of property held. Part B applies if you held C$250,000 or more at any time, and lists each property by country, with costs, income and gains.
5. Report the income on your T1 in Canadian dollars. Indian interest, dividends and rent are taxable in Canada, and foreign tax credits on Form T2209 may apply; see the India-Canada treaty guide.
6. File with the return by April 30, or June 15 for self-employed filers. Individuals can file the T1135 electronically.
7. Keep your working papers: rupee conversion rates, statements and purchase documents. Use a consistent, documented rate.

Documents you need

• Bank statements and fixed deposit certificates for each Indian account
• Demat and mutual fund consolidated account statements
• Purchase deeds, registration papers and rent agreements for property
• Insurance policy schedules and premium receipts
• Loan agreements and repayment records
• Indian TDS certificates and statements showing income by asset
• Exchange rates for purchase dates and the year

Deadlines and penalties

The T1135 is due on the same date as your tax return for the year. The CRA's penalty page says the penalty for failing to file a return is $25 per day for up to 100 days, with a $100 minimum and a $2,500 maximum, and $500 a month for up to 24 months (maximum $12,000) where the failure is knowing or grossly negligent. After 24 months the penalty can reach 5% of the cost of the foreign property. For a knowing or grossly negligent false statement or omission on an information return, the penalty is the greater of $24,000 or 5% of the cost involved. If you fail to report foreign income and the T1135 was not filed on time, the CRA's reassessment period is extended by three years. The CRA lists the Voluntary Disclosures Program as the route for catching up; see CRA voluntary disclosures.

Country notes: Canada, India and the U.S.

In India, an NRI's NRO account interest carries tax deducted at source and may need an Indian return; see NRE, NRO and FCNR accounts. The RBI states that NRO balances are remittable up to USD 1 million per financial year, subject to conditions. If you are also a U.S. citizen, green card holder or resident, the same Indian accounts go on the FBAR and Form 8938, and Indian mutual funds raise PFIC questions; see U.S. taxpayers with India income and assets and the three-country account reporting guide. The general rules are on the T1135 reporting page.

Worked example

Vikram and Pooja live in Brampton. Their Indian holdings, converted at documented rates, have these costs: NRO savings and fixed deposits C$38,000, mutual funds C$30,000, a Pune flat rented to tenants C$115,000 and a Hyderabad flat used by Vikram's parents C$60,000. The Hyderabad flat is a personal-use property, which the CRA excludes. The remaining total is C$183,000, above C$100,000 and below C$250,000, so they use the simplified Part A for 2025, due April 30, 2026. They also report the rent and interest on their T1 and claim a foreign tax credit for Indian tax paid. If they sold the Pune flat and bought a larger one at C$260,000, Part B would apply. Numbers are hypothetical.

Mistakes to avoid

• Testing each account separately instead of the total.
• Using market value instead of cost.
• Assuming NRE accounts are exempt because the interest is not taxed in India.
• Leaving out jointly held accounts and property.
• Forgetting that the threshold is checked at any time in the year, including cash that moved through an account.
• Assuming nobody will notice: the treaty includes an exchange-of-information article (Article 26).

How we can help

We are a U.S. CPA firm in the Aurora, Illinois area. We do not file Canadian returns or the T1135. If you are also a U.S. taxpayer, we handle FBAR, Form 8938 and PFIC reporting for the same Indian and Canadian accounts, and we coordinate with your Canadian CPA so the T1135 and the U.S. forms use the same asset list, and with your Indian Chartered Accountant for Indian filings. See foreign account and asset reporting, cross-border tax services and the cross-border hub.

Frequently asked questions

General information only. It is not tax, legal, accounting or immigration advice for your situation, and rules change; confirm the current rules with the official source or a licensed professional in the relevant country.