Can I keep my Canadian bank accounts open?

Yes. Keeping a Canadian bank account allows you to receive foreign income directly offshore, preserving its tax-free status under RNOR. If you receive that income directly in an Indian bank, it becomes taxable in India immediately.

Do I need to declare my Canadian assets in India?

Yes. You must file Schedule FA (Foreign Assets) in your Indian Income Tax Return every year. This is mandatory for all Residents (including RNORs). You must declare your RRSP balance, TFSA balance, Canadian bank accounts, and any foreign stocks.

Moving Back to India from Canada: RRSPs, TFSAs, and Exit Tax

Q: How does RNOR status actually save me money?

If you qualify as RNOR (Resident but Not Ordinarily Resident), your foreign income (like dividends, interest, and capital gains from your global portfolio) is tax-free in India. This gives you a 1 to 3-year window to rebalance your portfolio without paying Indian taxes.

Gemini said

Indian professionals who are moving back from Canada often lack clarity about how they can manage their overseas holdings like stocks, ETFs, RRSPs, and TFSAs after moving back.

This article explains how you can manage your overseas holdings after moving back to India and navigate complex rules like the CRA's departure tax and deemed disposition.

We also cover your new Indian tax and reporting requirements, your changing tax residency status, how you can avoid double taxation, and RNOR rules and opportunities.

What happens to my stocks when I move back to India?
What's the best way to stay invested globally after moving back?
What happens to my RRSP, TFSA, and CPP when I move back to India?
Tax and reporting implications of moving back
RNOR status and how it affects you

What happens to my stocks when I move back to India?

When you move back to India, the first major hurdle you face is Canada's departure tax.

Canada's departure tax triggers a deemed disposition on most non-registered capital property at fair market value (FMV) the day before you cease your Canadian tax residency. The Canada Revenue Agency (CRA) treats your assets as if you sold them, taxing 50% of the capital gains at your marginal rate (up to roughly 53% combined federal and provincial).

This applies to public stocks, mutual funds, ETFs (both domestic and foreign), and private company shares held in standard, non-registered investment accounts.

Which assets are exempt from the departure tax?

Your registered plans, including your RRSP, RRIF, TFSA, employer pensions, and Canadian real estate, are exempt from the deemed disposition exit tax.

What if I bought the stocks before moving to Canada?

Stocks or ETFs bought before your Canadian residency are subject to deemed disposition, but you are only taxed on the gains accrued during your residency. Your pre-arrival Adjusted Cost Base (ACB) carries over. The CRA only taxes the difference between the FMV on the day you leave and the FMV on the day you arrived.

Can I defer this tax?

If you have a liquidity crunch or plan to return to Canada, you can elect to defer the payment of this departure tax by filing a Section 220(4.5) election using Form T1244. You must post "adequate security" (like a bank letter of credit) with the CRA. Furthermore, short-term residents who lived in Canada for less than 60 months in the past 10 years are exempt from deemed disposition on property they owned before moving to Canada.

What happens to the assets I choose to keep?

Under Indian FEMA regulations, you are legally allowed to indefinitely hold any foreign stocks or ETFs you acquired while living in Canada.

However, while Indian law allows you to keep them, Canadian platforms might not:

Retail Fintechs (Wealthsimple): These platforms generally cater strictly to Canadian residents. If you update your tax residency to India, they may restrict your account to "liquidate-only" mode.
Traditional Bank Brokers (Questrade, TD Direct Investing, RBC Direct): These are sometimes more flexible and may allow you to maintain a non-resident account. However, you will likely face high platform fees, trading restrictions, and you will have to manage your complex Indian tax reporting manually.

What's the best way to stay invested globally after moving back to India?

The best way to stay invested globally is to transfer your investments into a platform specifically built for global investing from India.

You do not need to sell your non-registered stocks just because your Canadian broker is restricting your account. Instead, use an in-kind transfer (like AON/ACATS). This allows you to move your entire eligible portfolio "as is" to an India-friendly platform like Paasa.

These platforms allow you to maintain your positions and trade normally, while providing India-specific compliance support and tax documents tailored for your mandatory Schedule FA reporting.

What happens to my RRSP, TFSA, and CPP when I move back to India?

You can keep all major Canadian retirement accounts after returning to India. They remain open with your provider and continue to grow. However, the tax treatment changes significantly.

1. RRSP (Registered Retirement Savings Plan) and RRIF

You can keep your RRSP indefinitely. There is no forced closure, though your contribution room freezes since you no longer have Canadian earned income. You can also convert it to a RRIF at age 71 as usual.

Canadian Tax: Canada imposes a 25% non-resident withholding tax on lump-sum withdrawals. However, for periodic pension payments, this can be reduced to 15% under the India-Canada Double Taxation Avoidance Agreement (DTAA) by filing form NR301.
Indian Tax: Once you are a full Indian tax resident (post-RNOR), withdrawals are taxed at your applicable slab rates. You can claim a full DTAA credit in India for the 15% or 25% tax already withheld by Canada to avoid double taxation.

2. TFSA (Tax-Free Savings Account)

You can fully retain your TFSA. You cannot make new contributions as a non-resident, but the investments inside continue to grow tax-free worldwide from the CRA's perspective.

Canadian Tax: There is zero Canadian tax on TFSA withdrawals. It remains a non-taxable event in Canada.
Indian Tax: India does not recognize the tax-free status of the TFSA. You must report the account value in Schedule FA of your Indian tax return. While the taxation of TFSA withdrawals in India is highly debated (some argue it is exempt foreign income), the income generated inside the account may be subject to Indian taxes once you are a full resident.

3. CPP (Canada Pension Plan)

The CPP is a portable lifetime benefit based on your mandatory contributions during employment. You can start drawing it at age 60 or 65, even from India.

Canadian Tax: Canada applies a 25% withholding tax on CPP payouts sent abroad. (You may apply for an NR5 waiver if your overall global income is very low).
Indian Tax: Once you are a full resident, this is taxed at your standard slab rates as pension income, and you can claim a foreign tax credit for the Canadian withholding.

Tax and reporting implications of moving back to India

When you permanently return to India, your tax status eventually shifts from being a Non-Resident Indian (NRI) to a Resident.

This brings two major changes: your global income becomes taxable in India, and your reporting requirements increase significantly.

To learn more about how your global income is taxed in India and the reporting requirements, read:

When do you become an Indian Tax Resident?

Under the Income Tax Act, you are considered a tax resident of India if:

You are physically present in India for a period of 182 days or more in the tax year (182-day rule), or
You are physically present in India for a period of 60 days or more during the relevant tax year and 365 days or more in aggregate in the four preceding tax years (60-day rule).

Once you meet this criterion, you are legally required to pay tax in India on income earned anywhere in the world, including Canadian interest, dividends, and capital gains.

What is RNOR status and how does it affect me?

RNOR (Resident but Not Ordinarily Resident) is a transitional tax residency status for returning NRIs. It functions as a bridge between being a Non-Resident and becoming a full Ordinary Resident.

You typically qualify for this status if you meet one of the following criteria:

You have been an NRI for 9 out of the last 10 financial years.
You have lived in India for 729 days or less in the preceding 7 financial years.

This status grants you a 1 to 3-year window where your global income is treated differently from that of a standard Indian resident.

What benefits can I get from this status?

As long as you hold RNOR status, your foreign income is NOT taxable in India, provided it is received outside India first. This allows you to manage your Canadian assets without immediate tax liability in India.

Global Stocks & ETFs: If you sell them while you are RNOR, the capital gains are tax-free in India. (Note: You still need to account for your Canadian tax obligations based on the departure tax).
Canadian Bank Interest: The interest earned in your Canadian accounts is tax-free in India.
RRSP/TFSA Protection: Any withdrawals or income generated within your Canadian registered accounts are not taxed by India during your RNOR window.

To utilize these exemptions, you must receive the funds in your Canadian bank account first. If you wire sale proceeds or dividends directly to an Indian bank account, the income is considered "received in India" and becomes fully taxable immediately.

Common Questions Canadian NRIs Have About Moving Back

Can I send money from India and buy more overseas stocks?

Yes. You can remit up to $250,000 USD equivalent per financial year under the Liberalised Remittance Scheme (LRS) to invest in foreign stocks. However, be aware that transfers exceeding ₹10 Lakhs in a year attract a 20% TCS (Tax Collected at Source), which you can claim back as a refund or tax adjustment when filing your income tax return in India.

When do I become subject to FEMA upon moving back?

You become a resident under FEMA immediately upon landing in India if your intention is to stay for an uncertain period or for employment and business. Unlike income tax residency (which counts days), FEMA residency applies the moment you return to settle.

Can I continue operating my Canadian bank account?

Yes. Section 6(4) of FEMA allows you to continue holding and operating foreign bank accounts, stocks, and properties if they were acquired when you were a resident outside India. You are not legally required to close them.

Can I keep my NRO account?

No. Once your status changes to Resident, you are legally required to inform your bank and convert your NRO account to a standard Resident Savings Account. Continuing to hold an NRO account as a resident is a violation of FEMA regulations.

About Paasa

Paasa is a global investing platform built specifically for Indian residents and returning NRIs. We provide direct access to over 10 global exchanges and support 9 global currencies, allowing you to build a truly international portfolio.

Seamless "In-Kind" Transfers: You can move your entire global stock portfolio directly to Paasa. This allows you to consolidate your assets in one place without triggering a tax event.
The Compliance Advantage: Paasa provides the exact reports you need for your Indian tax returns and foreign asset disclosures, eliminating the need for manual calculations.
Estate Tax Protection: Paasa offers access to Ireland-domiciled (UCITS) ETFs, allowing you to legally shield your investments from the US Estate Tax if your portfolio includes US equities.

Frequently Asked Questions

Do I have to sell my Canadian stocks when I move back to India?

No. You are legally allowed to hold foreign shares and assets indefinitely if you acquired them while you were a non-resident. However, if your Canadian brokerage restricts accounts for non-residents, you should execute an in-kind transfer of your assets to a globally compliant platform.

What is the Canadian Departure Tax (Deemed Disposition)?

When you stop being a Canadian tax resident, the CRA treats your non-registered assets as if they were sold at their current market value, triggering a capital gains tax event. You must pay tax on these "paper profits," though registered accounts like RRSPs and TFSAs are exempt.

Do I have to close my RRSP or TFSA when I leave Canada?

No. You can keep your RRSP, RRIF, and TFSA open indefinitely. However, you cannot make new contributions to them as a non-resident. Withdrawals from an RRSP will be subject to Canadian withholding tax, while TFSA withdrawals remain tax-free in Canada (though they may be taxable in India).

How does RNOR status actually save me money?

A Guide for NRIs Returning to India from Canada in 2026