1 week ago
Returning to India May Tax Salary From Canadian Employment
A person moved permanently from Canada to India in September 2026 but kept working for a Canadian employer.
They may become a tax resident of India if they stay there for more than 182 days during the relevant financial year.
Because they lived in Canada for many years, they may be treated as a Resident but Not Ordinarily Resident.
Money earned for work done in Canada before the move would generally not be taxed in India under these assumptions.
Money earned for work done from India would generally be taxable in India.
This is true even if the employer deposits the salary into a Canadian bank account.
The place where the work is performed matters more than the location of the bank account.
The Canadian employer may also need to examine whether the employee's work creates a permanent establishment in India.
The individual returned permanently to India in September 2026 while continuing Canadian employment.
For financial year 2026–27, staying in India for more than 182 days would likely make the individual an Indian tax resident.
Based on residence in Canada since 2015, the individual would likely qualify as Resident but Not Ordinarily Resident.
Salary for services performed before returning to India would generally not be taxable in India under the stated assumptions.
Salary attributable to services performed from India would generally be taxable in India, even if credited to a Canadian bank account.
- Who
- An individual who lived and worked in Canada since 2015 and returned permanently to India.
- What
- The Indian tax treatment of salary from continuing Canadian employment after the individual’s return.
- Where
- The individual works from India after returning, while salary continues to be credited to a Canadian bank account.
- When
- The return occurred in September 2026; the relevant assessment concerns financial year 2026–27.
- Why
- Salary is generally treated as accruing where the employment services are performed; services performed from India may therefore create Indian tax liability.
Key facts
- Return date
- September 2026
- Relevant financial year
- 2026–27
- Likely residency threshold
- More than 182 days in India
- Likely status
- Resident but Not Ordinarily Resident, based on residence in Canada since 2015
- Pre-return salary
- Generally not taxable in India for services performed outside India, under the stated assumptions
- Post-return salary
- Generally taxable in India for services performed from India
- Bank-account location
- Crediting salary to a Canadian bank account does not by itself prevent Indian taxation
- Employer issue
- The Canadian employer may need to evaluate possible permanent establishment exposure in India
Sources
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