Canada NRIs: The India-Side 2024-26 Tax Changes, Clearly

The India-Canada DTAA rates remain: 15% on interest, 15% on dividends, standard capital gains treatment. Not amended in 2024-26. What did change on the India side:

**Section 148 reopening.** Finance (No.2) Act 2024 cut the window to 3 years 3 months for small cases, 5 years 3 months for escaped income above ₹50L. The 10-year window is gone. This is net positive for Canada NRIs, fewer old returns can be reopened.

**Section 151A faceless rule.** Telangana HC and Supreme Court (2024-25): Section 148 notices bypassing the faceless scheme are void. Check any open notice you have.

**Budget 2024 LTCG.** 12.5% flat without indexation on NRI property sales from 23 July 2024. NRIs are not eligible for the resident-only 20%-with-indexation carve-out. Canadian NRIs selling ancestral property in India are hit by this on the full gain.

**Black Money Act safe harbour.** Raised to ₹20 lakh for movable foreign assets, 1 October 2024 (Finance (No. 2) Act 2024 amendment).

Canada Revenue Agency's gross-negligence penalty for unreported foreign assets under ITA s.163(2.4) is the greater of CAD 24,000 or 5% of the cost amount of the unreported property — confirmed in CRA's 2024 administrative position. CRS (Common Reporting Standard) data-sharing with India now covers account balances, interest, dividends, and gross proceeds from asset sales.

For Canada NRIs, this means T1135 filings need to accurately disclose Indian bank accounts, Indian mutual fund holdings, and Indian stock portfolios. The threshold for T1135 filing kicks in at CAD 100,000 aggregate foreign property, and most Canada NRIs with any Indian real estate cross that instantly.

CRA can cross-check what you declared in Canada against what Indian banks reported. Mismatches trigger audits.

1. **Claim DTAA on the India side.** Form 10F + CRA TRC (Form NR301 or NR73), interest at 15%, dividends at 15%. File the Indian ITR claiming treaty rates.

2. **Report everything on T1135.** Indian FDs, MFs, property, stocks. At aggregate value > CAD 100K, you must file.

3. **Foreign Tax Credit on the Canadian return.** Use the Indian TDS paid (at the treaty rate) to reduce your Canadian tax on the same income.

4. **If you're selling Indian property**, Form 13 Section 197 first. Budget 2024 means the buyer will withhold 12.5% on the full sale price otherwise, and Canadian LTCG is calculated on the Canadian dollar value, so exchange rate matters.