Why becoming a Canadian resident puts your Indian assets in play
Canada taxes residents on worldwide income and gains. From the day you become a Canadian tax resident, a future sale of your Indian flat, shares or gold counts as a Canadian taxable event, even though the asset sits in India and grew in value while you lived there.
Without a starting point this would be harsh: you could be taxed in Canada on twenty years of Indian growth that had nothing to do with Canada. Canada's law avoids that. It treats you as re-acquiring most of your property at its market value on your arrival date, so only post-arrival growth is taxed.
The India side is untouched. India keeps taxing the Indian asset under Indian law on the Indian cost basis (what you actually paid, or the 1 April 2001 value for older property). The landing-day value is a Canadian cost base for the Canadian return. It doesn't replace your India cost.
The landing-day step-up, in plain terms
The rule is the "deemed acquisition" on becoming resident (subsection 128.1(1) of Canada's Income Tax Act). On the day you become a Canadian tax resident, you're treated as acquiring your property again at its fair-market value that day. That value becomes the asset's Canadian cost base.
For Canadian purposes, it's a clean reset:
| Before arrival | Canadian cost base after arrival | |
|---|---|---|
| Indian flat bought in 2009 | Original 2009 price | Market value on your landing day |
| Indian listed shares | Original purchase cost | Market value on your landing day |
| Indian gold / units | Original cost | Market value on your landing day |
Say your flat was worth a certain amount on your landing day and you sell it three years later for more. Canada taxes only that three-year increase, not the gain from 2009 to your arrival. The protection rests entirely on having a credible arrival-day value on record. A few asset types (such as Indian real estate that is "taxable Canadian property", or certain pension interests) fall outside this reset, so each asset is reviewed, not assumed.
Where the India side does the work
The arrival-day value is a Canadian concept, but for Indian assets the credible evidence is Indian-side. A Canadian accountant can't value a flat in Pune or read an Indian demat statement the way an Indian CA can.
For each Indian asset, the value on your landing date comes from Indian records: a registered valuer's report for property, the recognised-exchange closing price for listed shares, the published net asset value for mutual-fund units, and the gold rate for that date. An Indian CA assembles these into one dated schedule, asset by asset, value by value. That your Canadian accountant relies on to set each Canadian cost base.
This matters most for the asset you're most likely to sell later: Indian property. A valuation fixed on your exact landing date, while documents and comparables are still accessible, is far stronger than one reconstructed years later when you eventually sell. Getting it on record early is the single most useful India-side step a newcomer can take.
A worked example: Harpreet's move to Toronto
Harpreet moves to Toronto and becomes a Canadian tax resident on a date in 2026. She owns a flat in Mohali bought in 2010, a portfolio of Indian listed shares, and some sovereign-gold holdings.
For Canada, all three are deemed re-acquired at their market value on her arrival date. An Indian CA fixes that day's value for each: a registered valuer's report for the Mohali flat, the exchange closing prices for her shares, the gold rate for the units. These go into one landing-day valuation schedule.
Three years on, Harpreet sells the Mohali flat. India taxes the Indian gain on her India cost basis under Indian law. Canada taxes only the rise from her arrival-day value to the sale price, protecting the 2010-to-2026 growth from Canadian tax. Because her Indian CA documented the arrival-day value up front, her Canadian accountant applies it without scrambling to reconstruct an old number. The valuation, not a guess, is the load-bearing piece.