Watch: Moving Back to India? What Happens to CPP, OAS and GIS When Leaving Canada
A practical breakdown of what usually happens to CPP, OAS, GIS, and pension taxes when someone leaves Canada and retires in India.
The full write-up, with the numbers and the links.
What this conversation covers
- Important Accuracy Note
- The big picture: which benefit survives the move?
- CPP: the simplest benefit to understand
- OAS: where residence history starts to matter
- How the India-Canada agreement can help
- GIS: the benefit many retirees lose
- Tax withholding and treaty questions
- Worked examples using the episode's scenarios
- Before-you-leave checklist
- Frequently asked questions
Transcript
Auto-generated captions, lightly cleaned
0:00 Imagine this, you worked in Canada for 25-30 years. You contributed to CPP, qualified for OAS, and ready for retirement. But, instead of spending the retirement in Canada, you have decided to move back to India. Lower cost of living, closer to family, financially sounds like a smart move. But, many immigrants don't realize this until after they leave Canada. One of your benefits completely disappears. The another one depends on how long you lived in Canada. And the taxes that you pay on this pension changes overnight once you become a non-resident. In this video, I will show you exactly what happens to your CPP, OAS, and GIS, and the taxes that you have to pay once you move back to India, as well as partial OAS and India-Canada
1:00 Tax treaty. Because getting this wrong could cost you thousands of dollars per year during your retirement. I will also walk you through some real examples so you can exactly understand how this works. Let's dive in. Let's start with CPP, Canada Pension Plan. This is the easiest benefit to understand. CPP is based on the amount of money that you contributed during your working years in Canada. And the amount is same irrespective of where you live in the world. Let's say you move back to India, you would receive the same amount of CPP in India, too. So, the amount of CPP is independent of where you are living in the world after the retirement. Let's take an example. Raj worked for 25 years in Canada. He earned good income and contributed to CPP regularly. At age 65,
2:04 He qualified for CPP and he's getting $950 per month. And he decided to move back to Bangalore. He would still receive his $950, which is what he was getting before moving out to India. And this amount would remain same. It can be deposited into his Canadian bank account or transferred to his international bank, which is in India. The only thing that might change is the tax treatment, which we will discuss later. Now, let's talk about OAS, Old Age Security, and this is where many immigrants get confused. This benefit depends on how many years you have lived in Canada after age 18.
2:50 For full OAS amount, one has to live in Canada for 40 years after age 18. And if you don't qualify for that, you will get partial amount. So, for example, the formula works like this. The number of years you have lived in Canada after age 18 divided by 40 times the full OAS amount. For 2026, this full OAS amount is $742 per month. Let's walk through this with an example. Meena moved to Canada at age 35 and she worked for 25 years before retiring. And her OAS is going to be 25 years, which is the number of years she has spent in Canada, divided by 40 times 742. So, she would be qualified for receiving $463.75 per month for her OAS.
Read the full transcript (8 more sections)
3:52 Now, let's talk about how OAS would be impacted if you move back to India. To receive OAS while living outside Canada, one must have lived in Canada for at least 20 years after age 18. If you qualify for this rule, you would be eligible to receive OAS even after leaving Canada. Let's take an example. Ranch moved to Canada at age 40. He worked for 22 years and after retiring, he moved to India. Since he qualifies for living in Canada for at least 20 years, he would qualify to get his OAS even after moving to India. If someone lived in Canada for less than 20 years, their OAS might stop after 6 months.
4:41 However, here is an important one. India and Canada has a social security agreement which could help in this situation. This is something many people don't know. India and Canada has signed a social security agreement in 2015. This agreement helps people who worked in both countries. This agreement allows people to combine the periods of contribution in both countries to qualify for these benefits and this is called totalization. Say, if you have but you have contributed to EPS in India, you could qualify to get the OAS benefits even after moving back to India. So, this social security agreement plays a very big role for someone who is moving back to India and who doesn't qualify the threshold of 20 years.
5:37 Here is a practical tip. If you have lived in Canada for 10 years, it might make sense to wait and get qualified for OAS before leaving Canada. Because once you apply for OAS after leaving Canada, your application will be denied because you don't qualify for the 20 years. And the other thing that people do is spend 6 months in Canada and 6 months abroad so that they don't lose this benefit. This is something worth considering before making your move back to India. Let's quickly summarize the OAS eligibility. Someone who lived for more than 20 years and they will be eligible for OAS irrespective of where they live in the world. 10 to 19 years and living in Canada, they are eligible. Who someone who lived less than 10 years, they are not eligible. And someone who lived less than 20 years and living outside Canada, typically, they are not eligible. However, if they have contributed to the Indian EPS and qualify for that, they might qualify for
6:39 OAS under the Indian-Canada Social Security Agreement of 2015. Now, let's talk about Guaranteed Income Supplement, which is GIS. GIS is tied to you living in Canada. If you left Canada for more than 6 months, your GIS stops. And it is completely based on you living in Canada. There is no tax treaty protection, no social security agreement that can help. Here is a practical tip. This is where people spend less than 6 months abroad like snowbirds so they are back in Canada so that they won't miss this GIS benefit. Now, let's talk about taxes. Canada and India has double taxation avoidance agreement DTAA.
7:28 With this DTAA agreement, the same income is not taxed twice. And the other important thing is for income like pensions, which is CPP, OAS, the tax withholding is only 15% without this agreement the tax withholding would have been 25% let's take an example someone who receives about $1,000 for CPP per month and about $400 for OAS and the total amount would have been $1,400. If they were living in India the tax withholding and if they applied the DTAA the tax withholding is going to be 15%. So they would be receiving $1,190 per month after the withholding tax.
8:17 And the key thing is the tax that was withheld in Canada can be credited as a foreign tax credit when they are filing for their taxes in India and this prevents double taxation. Now let's walk through a realistic retirement scenario. Ajay lived in Canada for 27 years and he was getting $900 per month for CPP and OAS which is partial and he's getting $480 per month and the GIS is around $500 per month. So total in Canada he was getting $1,880 per month. Now he moves to India. So the GIS stops completely because he no longer lives in Canada.
9:05 And the other amount is going to be CPP which is $900 and the OAS is going to be $480. And the total amount is going to be $1,380 and with the treaty the tax withholding is going to be 15% so the net income he's going to be receiving is $1,170 per month. At the current exchange rate that's roughly around 97,000 rupees. For many retirees in India this provides a comfortable retirement income. Here is a quick summary on how these different benefits get impacted once someone moves back to India. Please take a screenshot and this is a good reference that you can use in the future.
9:52 For many immigrants moving back to India for retirement makes sense. Low cost of living, different lifestyle, living close to family. But before making the move, it's important to understand how your pension actually works. Small details like OAS residency rules, the tax implications, GIS eligibility. These all can make a huge difference on your retirement income. If you're someone who is living abroad, US, Canada, Europe, and you are thinking about moving to India, this channel focus primarily providing real-life stories of families who move back to India, financial information to understand the cross-border taxation, what to do with your assets, retirement income, and much more. And if this is something that's very valuable to you, consider subscribing it because the goal here is to help you and have enough information so that you can make an informed decision about moving back to India.
