Hi,
My wife and I moved to Ontario, Canada on Work Permit on July 9, 2022 and will be filing Canadian return for the first time.
We assume we are Canada resident for income tax purposes in 2022 as we are both here together, have a rented house, Canadian bank accounts, Ontario health card, etc.
We understand we must declare any foreign income earned by us while we were in Canada (ie, July 9 – Dec 31, 2022).
We found that we have some Indian employer income and interest from Savings and Term deposits in India that needs to declared.
TDS on these incomes and interests is currently zero.
However, Tax year in India is Apr 2022 – Mar 2023, and the final income tax return is not yet filed in India (due date is Jul 31, 2023).
Without the Indian IT return, we don’t know our final tax liability, which would take into account all our income from Apr 2022 to Mar 2023.
If we report the above foreign income without any TDS in Canada, we will not be able claim any tax credit in Canada and it will be fully taxable.
This income will also be fully taxed in India when we file the return in India later this year.
So it appears we will be double taxed on the same income in both Canada and India without any relief.
What is the way to avoid double taxation in such case? Please help.
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