Moving From Canada to India Tax Checklist: Departure Tax, RNOR and Accounts

A moving from Canada to India tax checklist must cover three separate events: leaving Canada, which can trigger a deemed sale of your investments; arriving in India, where your residential status for the tax year decides what income India can tax; and managing assets and accounts you leave behind in Canada. Many returning NRIs from Toronto, Mississauga, Calgary and Vancouver focus on the flight and discover the tax filings afterward. Done in order, the move can use Canada's registered-account exemptions and India's "not ordinarily resident" status to your advantage. This guide gives the sequence, with the 2026 rules in mind.

What should be on a moving from Canada to India tax checklist, stage by stage?

How do you leave Canada step by step?

1. Fix your departure date. The CRA says you become a non-resident on the latest of the date you leave, the date your spouse or common-law partner and dependants leave, and the date you become resident of the new country. If you keep significant ties, you may stay a factual resident. Form NR73 asks the CRA to determine status.
2. Value property on the departure date. Shares, funds, jewellery and collections are treated as disposed of at fair market value and reacquired at that amount. Exempt categories include Canadian real property, certain business property and registered plans such as RRSPs, RRIFs, TFSAs and RESPs.
3. File Form T1161 if the value of all property was more than C$25,000. A late T1161 carries a $25-per-day penalty (minimum $100, maximum $2,500).
4. Report any gain on Form T1243 and Schedule 3, or elect on Form T1244 to defer the tax until you sell, by April 30 of the year after you emigrate.
5. File your final return with world income to the departure date and your spouse's net world income for that period. Moving expenses for a move out of Canada are generally not deductible.
6. Decide on registered accounts. You can keep a TFSA but cannot contribute and its room stops growing. RRSP withdrawals as a non-resident face Canada's default 25% Part XIII withholding; see non-resident tax in Canada. Ask your CA how India taxes RRSP and RRIF income after you become resident.
7. Tell payers and stop benefits. Non-residents generally cannot receive the Canada child benefit or Canada Groceries and Essentials Benefit.

What changes in India when you return?

1. Test residence for the Indian tax year. The Income Tax Department says the basic tests remain: 182 days or more in the tax year, or 60 days plus 365 days in the preceding four years. A citizen or person of Indian origin visiting India is tested at 182 days, or 120 days if Indian-source income exceeds ₹15 lakh. For tax years starting April 1, 2026, the Income-tax Act, 2025 applies; earlier years stay under the 1961 Act.
2. Check RNOR. An individual who was non-resident in nine of the ten preceding years, or in India 729 days or fewer in the preceding seven years, is not ordinarily resident. RNOR status limits what India taxes in those years; your CA confirms the scope. See the India residency guide.
3. Change bank accounts. The RBI says NRE accounts should be designated resident accounts, or funds moved to a resident foreign currency account, immediately on return to take up employment or on a change in residential status; NRO accounts may be designated resident accounts; FCNR(B) deposits can continue to maturity. The RBI also says a resident can keep a foreign currency account abroad that was opened when non-resident. See NRE, NRO and FCNR accounts.
4. Disclose foreign assets. Resident taxpayers report foreign assets and foreign income as the return requires, and the Black Money Act carries severe penalties. See Schedule FA and Black Money Act disclosure and India foreign asset penalties.
5. Consider the 2026 scheme. Section 133 of the Finance Act, 2026 lists a fee of ₹1 lakh for foreign assets acquired from income earned while non-resident but not declared on becoming resident, if the value does not exceed ₹5 crore. It starts only when notified. Ask your CA before relying on it.

Documents to gather

• Passport, PR card or work permit, and the date you left
• Canadian Notice of Assessment, T4 slips and brokerage statements
• Fair market value of non-registered property on departure
• RRSP, TFSA, RESP and pension statements
• Property sale or lease documents
• Indian PAN, NRE and NRO statements, and travel records for day counts

Deadlines and penalties

Canada: the final T1 and T1161 are due April 30 of the year after you leave, June 15 if you are self-employed (payment still April 30); the CRA says you must send T1161 by the filing due date even if you are not otherwise required to file. The T1244 election is due April 30 of the year after you emigrate. India: your CA sets the return due date. Penalties for undisclosed foreign assets come from the Black Money Act; they are outside this guide, so see the linked notice page.

Worked example

Meera returns from Toronto to Pune on November 15, 2026 after nine years in Canada. She holds an RRSP of C$180,000, a TFSA of C$60,000, a Toronto condo, and non-registered shares worth C$120,000 with a cost of C$70,000. In Canada she leaves the RRSP, TFSA and condo outside the deemed sale, and reports a C$50,000 gain on the shares or defers it with Form T1244. Because her property exceeds C$25,000 she files Form T1161. In India, assume she visited about 30 days a year while abroad. For the tax year 2026-27 (April 2026 to March 2027) she is in India roughly 137 days from her return plus a few visits, below 182, and under 365 days in the prior four years, so she may be non-resident for that year even though she lives in Pune. For 2027-28 she exceeds 182 days and, having been non-resident in at least nine of the previous ten years, is RNOR. These facts are hypothetical; her CA confirms the result.

Mistakes to avoid

• Assuming the RRSP and TFSA are taxed on departure; they are exempt from the deemed sale.
• Skipping Form T1161 because "I owe nothing".
• Leaving NRE accounts as they are after returning.
• Failing to disclose Canadian accounts and the RRSP in India once resident.
• Selling the Toronto condo after leaving without Canadian advice, as non-resident sales have separate procedures.
• Assuming that a U.S. green card or citizenship ends when you leave; U.S. filing continues. See moving from the U.S. to India.

How we can help

We are a U.S. CPA firm in the Aurora, Illinois area. For clients who are also U.S. citizens, green card holders or former H-1B workers, we handle the U.S. side: last-year returns, FBAR and Form 8938 for Canadian and Indian accounts, and treaty positions. We coordinate with your Canadian CPA for the departure return and your Indian Chartered Accountant for residence and disclosure. We do not prepare Canadian or Indian returns. See relocation and immigration tax planning, 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.