Leaving Canada? Section 128.1 marks every non-RRSP asset to market.

When you cease to be a Canadian resident, you have a deemed disposition of every capital asset you own at fair market value, with limited exclusions. The Indian-side counterpart is Section 6 of the Income-tax Act, which determines when you become Indian-resident again on returning.

What's exempted from the deeming:

RRSP, RRIF, RPP, TFSA (separate rules; see RRSP/TFSA post).

Real property in Canada.

Canadian business assets.

Canadian-source pensions.

What's deemed-disposed:

Non-RRSP brokerage holdings (Canadian or foreign equity).

Cryptocurrency.

Indian shares held directly through a Canadian-resident broker.

Foreign rental property.

Precious metals.

The deeming triggers on departure day at fair market value, with cost basis as what you originally paid. Gain or loss enters your Canadian return for the year of departure.

Canadian tax law lets departing residents elect to defer the Canadian tax on the deemed gain until the asset actually sells.

File Form T1244 by the income tax filing deadline (30 April following the year of departure) along with security for the deferred tax. The CRA accepts a bank-issued letter of credit or an irrevocable standby letter for the deferred amount.

When you eventually sell the asset, you remit the deferred Canadian tax. If the asset has dropped in value, you can elect a reduction; if it's risen, you owe Canadian tax on the original deemed gain (not on subsequent appreciation).

Most Canadian-Indians with mid-sized portfolios (CAD 200,000 to 1 million) benefit from electing on equity holdings (no immediate cash bill, defer until sale). Cryptocurrency and meme stocks: skip the election; the volatility makes the security you'd post worth more than the tax.

Section 6 of the Income-tax Act gives returning NRIs RNOR (Resident but Not Ordinarily Resident) status for 2 to 3 years if they were NRIs for 9 of the prior 10 years.

During RNOR, foreign-source income is exempt from Indian tax. This includes future Canadian RRSP withdrawals, deferred capital gains paid to the CRA on actual sale (T1244 election), and Canadian rental income you keep collecting.

For a Canadian-Indian with CAD 800,000 of non-RRSP equity who deems-disposed at departure, the deemed gain (say CAD 200,000) is Canadian-only. India doesn't recognise it. When the assets actually sell, if you elected T1244, the Canadian tax falls due; the Indian side stays exempt during RNOR or applies Article 13 + Form 67 thereafter.

The cleanest path: depart in early Canadian tax year, claim T1244 deferral, sell assets during RNOR in India.

A Toronto-based Indian software engineer departs 1 July 2026 for Bengaluru. Holdings:

CAD 400,000 of US equity in a Questrade non-RRSP brokerage (cost basis CAD 250,000).

CAD 150,000 of Indian equity through Saxo Bank Canada (cost basis CAD 100,000).

CAD 80,000 of crypto on Wealthsimple Crypto.

RRSP CAD 250,000 (separate post).

Deemed disposition:

US equity gain: CAD 150,000.

Indian equity gain: CAD 50,000.

Crypto gain: nil to CAD 30,000 depending on cost basis.

Canadian capital gains tax at 50% inclusion rate applied to Toronto's marginal 53.53% top slab: roughly CAD 53,500 on the US equity gain, CAD 17,800 on the Indian equity gain.

With T1244 election: zero immediate cash. Security posted (bank letter of credit) for CAD 71,300. Tax falls due only when assets actually sell.

Without election: CAD 71,300 due 30 April 2027. Two years before any asset is sold to fund it.

We handle the Indian side. The Canadian side (departure-tax calculation, T1244 election, NR4 slip processing post-departure) needs a Canadian-side accountant. We coordinate with theirs.

Indian-side scope: Form 67 + DTAA Article 13 foreign-tax-credit math, Section 119(2)(b) condonation for past years, RNOR window planning, Schedule FA filing post-arrival, ITR-2 with foreign-asset disclosure.

Fee: ₹14,999 flat for the cross-border planning. Annual filing post-arrival: ₹4,999 flat per year. We don't charge contingent fees on departure-tax math because there's no recovery from the Indian side, only optimisation around the RNOR window.

If you're 12 months from your Canadian departure date and you haven't run the departure-tax numbers, book free CA appointment. Most engagements that come in late see ₹8 to ₹25 lakh of avoidable tax.

Q: What about my principal Toronto residence? Does the deeming apply?

A: No. Real property in Canada is excluded from the departure deeming. The principal-residence exemption may apply when you eventually sell. You can keep the property as a non-resident; CRA still taxes future rental and the eventual sale, just outside the departure deeming.

Q: I bought Indian equity in 2018 through a Canadian broker. Departure deeming applies?

A: Yes. The asset's character (Indian-listed shares) doesn't matter; the location of your brokerage account does. Canadian-resident brokerage = Canadian deemed-disposition rules. The shares get deemed-disposed at FMV the day you depart.

Q: I have CAD 50,000 of US Treasury bonds. Departure deeming?

A: Yes for the bonds (foreign capital asset held in a Canadian account). They get marked-to-market on departure. Interest accrued up to the departure date is also Canadian-taxable.

Q: Can I elect T1244 on some assets and not others?

A: Yes. The election is asset-by-asset. Most Canadian-Indians elect on listed equity (deferral worth cash flow), skip on volatile assets (security cost not worth it).

Q: I left Canada in 2023 without filing T1244. Can I file it retroactively?

A: The CRA's late-election relief lets you file up to 10 years late, but they expect a reasonable explanation. Book free CA appointment if you've already departed and the deemed gain bill is hanging over you.