T1135 for Indian Assets: The $100,000 Cost Rule, the Goa House Question, and What Ignoring It Costs

The T1135 is not a tax, which is precisely why so many Indian-origin Canadians miss it. Form T1135, the Foreign Income Verification Statement, collects no money. It is a disclosure — Canada's counterpart to the American FBAR we've covered for US-based NRIs — and the penalties attach to the failure to disclose, not to any unpaid tax. You can pay every dollar of Canadian tax you owe on your Indian income and still be penalized for the form you didn't know existed.

Here is the rule, from the CRA's own page: Canadian resident individuals (also corporations and certain trusts) must file Form T1135 if, at any time during the year, they owned specified foreign property costing more than $100,000.

Every load-bearing word in that sentence deserves unpacking.

"Costing" — not "worth"

The $100,000 threshold is based on cost amount, not fair market value. The CRA's T1135 questions-and-answers page says it plainly: the threshold uses the cost amount as defined in subsection 248(1) of the Income Tax Act, "generally the adjusted cost base and not the fair market value."

For a typical NRI this cuts both ways. The flat in Pune you bought for ₹40 lakh in 2010 counts at roughly CAD $91,000 — its cost converted at the ₹44-to-the-dollar rate of the 2010 purchase, not today's rate — even if it's worth ₹1.5 crore now. (If you owned it before immigrating, the cost is instead its fair market value on your landing day, usually higher still.) And the threshold is also aggregate: that flat plus ₹20 lakh across NRO fixed deposits plus a mutual fund folio built up with ₹15 lakh of purchases — call it another $55,000–60,000 at their own acquisition-date rates — lands the total near CAD $150,000, and the filing obligation is triggered even though no single asset crosses the line. At roughly ₹67 to the Canadian dollar in mid-2026, CAD $100,000 is only about ₹67 lakh — a threshold an enormous number of first-generation immigrants cross without feeling wealthy.

Two cost-amount rules matter constantly for Indian assets. Property received by gift or inheritance — the most common way NRIs acquire Indian real estate — takes a cost equal to its fair market value when received. And everything you owned before moving to Canada takes a cost equal to its fair market value on the day you became a Canadian resident, not what you originally paid.

The first year is free; the second year is not

New residents get one clean exemption: the CRA confirms that an individual does not have to file Form T1135 for the tax year in which they first became resident in Canada. Land in Toronto in September 2025, and no T1135 is due for 2025. (The exemption belongs to first-time residents only — a former Canadian resident re-immigrating doesn't get it again.)

That grace period is exactly where the trap lives. Your Indian accounts and property are revalued at fair market value on your landing date — often pushing you straight past $100,000 — and from your second tax year onward the form is due with your income tax return: April 30 for most individuals, June 15 if you or your spouse is self-employed. Nobody at the bank or the settlement agency mentions this. It surfaces years later, usually when an accountant asks the question no one asked before.

Which Indian assets count — and the Goa house nuance

Specified foreign property, defined in subsection 233.3(1), includes funds deposited outside Canada, shares of non-resident corporations, interests in non-resident mutual funds, debts owed by non-residents, and tangible property situated outside Canada. Translated into an NRI's actual balance sheet: NRE, NRO, and FCNR deposits all count — including NRE accounts, whose Indian tax exemption is irrelevant here (our NRE vs NRO vs FCNR guide covers what those accounts are) — as do Indian shares and demat holdings, Indian mutual fund folios, loans you've made to relatives or businesses in India, and any Indian real estate that isn't personal-use.

That last carve-out is the one worth reading twice. Personal-use property is excluded — the CRA does not require reporting of vacation property you use "primarily as a personal residence," where primarily means more than 50%. So the Goa house your family stays in every December, sitting empty otherwise, is not reportable no matter what it cost. Rent it out most of the year with a reasonable expectation of profit, and it becomes specified foreign property — reportable in full. The CRA's own Q&A even blesses the middle case: property rented occasionally without an expectation of profit, merely to recover maintenance costs, stays personal-use. The same page confirms that vacant land counts (income production is not required) and that ancestral jewellery is excluded as personal-use property. Whether a given house is "primarily" personal is a question of fact — if yours is rented five months a year, this is a genuine judgment call for a professional, not a guess.

Two ways to fill the form

Since 2015 the form has two tiers. If your total cost stayed under $250,000 throughout the year (about ₹1.7 crore), Part A's simplified method applies: tick a box for each property type, name the top three countries by cost — for most readers, a short list starting with IND — and report total income plus any gain or loss from dispositions. Cross $250,000 at any time, and Part B's detailed method requires every property individually: institution or description, country, maximum cost during the year, year-end cost, income, and any gain or loss. Between $100,000 and $250,000 you may choose either part; above it there is no choice. Individuals can file electronically with their return.

Where each Indian asset goes on Part B

Once the detailed method applies, the form stops being a checkbox exercise and becomes a sorting problem: Part B has seven categories, and a typical NRI balance sheet touches most of them. Here is the mapping for the assets Indian-origin filers actually hold.

Category 1 — funds held outside Canada. Your NRE, NRO, and FCNR balances, savings and fixed deposits alike, each reported by institution: name of the bank, country code IND, the maximum funds held during the year, the year-end balance, and the income earned. A PPF balance belongs here too — from the CRA's side of the border it is simply a deposit with a foreign institution, whatever the Indian tax code thinks of it.

Category 2 — shares of non-resident corporations. Your demat holdings: Reliance, HDFC Bank, Infosys, and every other Indian listed share, plus some stakes in private Indian companies — but check the foreign affiliate exclusion first: if you hold 1% or more directly and 10% or more together with related persons, the shares come off the T1135 and onto Form T1134 instead, a separate filing with its own larger penalty regime. The family business is more often a T1134 problem than a T1135 line item; smaller passive stakes stay here, at their cost amount, even if no dividend has ever been paid.

Category 3 — indebtedness owed by non-residents. The loan you made to your brother for his Gurgaon venture, and any Indian corporate bonds or NCDs. Informal family loans are the classic omission here: no statement arrives, so nothing prompts the memory.

Category 5 — real property outside Canada. The rented Pune flat, the vacant plot in Noida. (Category 4 covers interests in non-resident trusts, category 6 is the catch-all for other property.)

Indian mutual funds are the awkward case. They are structured as trusts under SEBI rules, and practitioners genuinely split between reporting them as interests in non-resident trusts (category 4) and as other property outside Canada (category 6). Pick one treatment, apply it consistently, and don't lose sleep — the CRA's enforcement energy goes to unreported property, not to good-faith category choices.

Category 7 is the exception that proves the cost rule: specified foreign property held through a Canadian registered securities dealer — say, Infosys ADRs sitting in your taxable brokerage account — can be reported in aggregate, country by country, using the highest month-end fair market value during the year rather than cost. It's the one corner of the form where market value, not cost, does the work.

The assets everyone forgets: LIC policies, PPF, EPF, and gold

The bank deposits and the flat make it onto most people's forms eventually. Four other holdings — near-universal among first-generation immigrants — almost never do.

LIC and other Indian insurance policies. An interest in a foreign insurance policy is specified foreign property, so the LIC endowment or money-back policy your parents started for you, and any ULIP, belongs on the form — generally at a cost amount built from the premiums paid. A pure term policy with no investment value adds nothing meaningful to your total, but policies with a maturity or surrender value are exactly the kind of quiet, decades-old asset that surfaces awkwardly in an audit.

PPF is reportable as a foreign deposit, as noted above — and its 15-year Indian tax holiday does not travel. Canada taxes the interest as it accrues, year by year, which surprises nearly everyone who assumed "exempt-exempt-exempt" meant something in Toronto.

EPF is the genuinely contested one. A case can be made that an employees' provident fund is an employer pension arrangement outside the T1135's reach; many cross-border accountants report it anyway because the exclusion is not clearly established and disclosure costs nothing. If your EPF balance is large — and after a fifteen-year Indian career it often runs past ₹50 lakh (roughly CAD $75,000) — get a professional opinion rather than an assumption.

Gold, finally, splits along the line the article has already drawn: jewellery is personal-use property and stays off the form, but investment gold — bars, coins, anything bought to hold rather than to wear — is tangible property situated outside Canada and reportable in category 6 at cost.

What you can safely leave off

The exclusions matter as much as the inclusions, because over-reporting wastes exactly the hours this form is notorious for.

Anything held inside a registered plan — RRSP, TFSA, RESP, RRIF — is excluded from specified foreign property entirely. In practice Indian assets rarely sit inside Canadian registered accounts anyway (the reasons are a story of their own — see our guide to TFSAs, RRSPs, and Indian assets) — but the exclusion does real work for India exposure: units of a Canadian-listed India ETF or Canadian mutual fund are Canadian property, full stop, and never touch the T1135 no matter how Indian the underlying portfolio is, even in a taxable account. If you want India in your portfolio without the reporting apparatus, this is the clean route.

Also excluded: property used exclusively in an active business you carry on — relevant if you still operate a genuine trade in India, though rare for Canadian residents — and, as covered earlier, the primarily-personal-use vacation home. What is not excluded is anything small: there is no per-asset floor, so once you're over the $100,000 aggregate, the ₹2 lakh (about CAD $3,000) dormant NRO account you forgot in a 2009 passbook belongs on the form alongside everything else.

Joint owners, spouses, and the exchange-rate arithmetic

The $100,000 threshold is per taxpayer, not per household, and there is no joint T1135. Each co-owner tests the threshold — and files, if over it — based on their own share of the cost, and the CRA looks at who contributed the funds, not whose name appears on the Indian title deed. A ₹1 crore flat bought entirely with your savings but registered jointly with your spouse for convenience is, for this purpose, generally yours: roughly CAD $150,000 of cost on your form, nothing on theirs. Genuinely split contributions divide the cost — two spouses who each funded half of that flat carry about $75,000 each, and if that's all either owns abroad, neither files. The division has to be defensible, though; it's the same contribution-tracing logic Canada applies to income attribution, and a paper trail of whose account the purchase money left is worth keeping.

The currency mechanics reward the same discipline. An asset's CAD cost is fixed once, at the exchange rate on the acquisition date — or the landing date, for pre-immigration assets — and never restated. Decades of rupee depreciation therefore don't erode it: a ₹30 lakh deposit made when the rupee traded near ₹50 to the Canadian dollar is a $60,000 cost forever, even though the same rupees are worth far fewer dollars today. Income, by contrast, converts at the rate in effect when received, and the CRA accepts the Bank of Canada's published rates — including the annual average rate for income that arrives in a steady stream, like monthly rent. Mixing these up — restating old costs at today's rate, or converting a full year's interest at a single cherry-picked date — is the most common self-inflicted error on otherwise honest forms.

A disclosure, not a tax — but the tax exists too

Filing a T1135 settles nothing about tax, and skipping it exempts you from nothing. As a Canadian resident you owe Canadian tax on worldwide income, and the CRA is explicit that residents must report all income from foreign property regardless of the $100,000 threshold. The classic mistake: NRE deposit interest is tax-free in India, so people assume it's tax-free, full stop. In Canada it is ordinary income at your marginal rate. Where India did tax something — TDS on NRO interest, tax on rent or capital gains — the Canada–India tax agreement prevents double taxation through the federal foreign tax credit on line 40500. The mechanics — and their limits — are in our DTAA guide.

The penalty math

The CRA publishes a table of penalties for foreign reporting forms. For the T1135, the ones that matter:

Failure	Penalty	Maximum
Late filing — s. 162(7)	$25 per day (minimum $100)	$2,500 per form
Knowing or grossly negligent failure — s. 162(10)(a)	$500 per month, up to 24 months	$12,000
Failure after a CRA demand — s. 162(10)(b)	$1,000 per month, up to 24 months	$24,000
False statement or omission — s. 163(2.4)	Greater of $24,000 or 5% of the property's cost	—

Note "per form": five missed years is five separate $2,500 penalties — $12,500 for paperwork, before interest. There is a quieter consequence too: if you failed to report income from specified foreign property and the T1135 was late or wrong, the CRA's reassessment window extends by three years — your old returns stay open longer. And India reports Indian financial accounts to Canada automatically under the OECD's Common Reporting Standard, so the assumption that Indian accounts are invisible stopped being true years ago.

If you've already missed years

Don't quietly start filing this year and hope. The CRA's Voluntary Disclosures Program — revamped effective October 1, 2025 to be easier to apply to — grants penalty relief case by case, and the CRA confirms it is available to T1135 filers who come forward before the CRA comes to them. Whether VDP, a taxpayer-relief request, or simple late filing fits your facts depends on how many years, how much unreported income, and how it all looks on paper — genuinely a cross-border accountant's call, and the fee will be a fraction of the penalty exposure.

One last piece of unglamorous advice: keep a running spreadsheet of every Indian asset's cost in Canadian dollars — converted at the exchange rate on the acquisition date, or landing-date fair market value for pre-immigration assets. Reconstructing fifteen years of rupee purchases into CAD cost bases is the single most painful part of a late T1135 cleanup. Tracked as you go, the form itself takes an evening a year.

Frequently asked questions

Do I have to file a T1135 if my Indian assets produced no income at all?

Yes. The filing test is ownership and cost, not income — a vacant plot in Noida that has never earned a rupee still counts toward the $100,000 threshold and still goes on the form. The CRA's T1135 Q&A confirms that income production is not required for property to be specified foreign property. Income matters to a different question — whether the personal-use exclusion applies to a house — but for deposits, shares, funds, and land, zero income changes nothing about the disclosure obligation.

Do NRE accounts really count, even though the interest is tax-free in India?

They count, in full. India's exemption on NRE interest is a creature of Indian law and binds nobody in Ottawa: the balance is funds held outside Canada for T1135 purposes, and the interest is ordinary income on your Canadian return at your marginal rate. The same goes for FCNR deposits. If anything, NRE accounts are the most commonly omitted category, precisely because "tax-free" leads people to assume "invisible" — an assumption the Common Reporting Standard retired years ago, since Indian banks now report these accounts to the CRA automatically.

My spouse and I own the Pune flat jointly — who files?

Each of you tests the threshold separately, based on your share of the cost — allocated by who actually contributed the purchase money, not by the names on the Indian registry. If you funded the whole flat, the whole cost is yours for T1135 purposes even with your spouse on the deed. If you genuinely paid half each, you each carry half the cost, and either, both, or neither of you may cross $100,000 once your other foreign assets are added. There is no joint or household filing; two spouses over the line file two forms.

Are my LIC policy, PPF, and EPF reportable?

The LIC policy, almost certainly yes — an interest in a foreign insurance policy is specified foreign property, generally at a cost built from premiums paid. PPF, yes: it is simply a foreign deposit to the CRA, and its interest is taxable in Canada as it accrues. EPF is the unsettled one — a defensible argument treats it as an employer pension outside the form's scope, but the exclusion isn't clearly established, and many cross-border accountants disclose it anyway because over-reporting carries no penalty and under-reporting does. For a large EPF balance, buy an hour of professional advice.

What exchange rate do I use for rupee assets?

Cost converts once, at the rate on the day you acquired the asset — or at fair market value on your landing date for anything owned before you became a Canadian resident — and is never restated afterward. Income converts at the rate when received; the CRA accepts Bank of Canada rates, including the annual average for recurring income like rent or monthly interest. At roughly ₹67 to the Canadian dollar in mid-2026, ₹67 lakh of cost is the $100,000 line — but for old assets, it's the historical rate that governs, not today's.

Does Indian exposure inside my TFSA or RRSP count?

No. Property held inside registered plans — RRSP, TFSA, RESP, RRIF — is excluded from specified foreign property, so nothing inside them ever appears on a T1135. The broader point is that how you hold India decides the paperwork: units of a Canadian-listed India ETF are Canadian property and stay off the form even in a taxable account, while directly held Indian mutual fund folios are reportable in full. Our guide to TFSAs, RRSPs, and Indian assets, linked above, covers why Indian investments and registered accounts rarely mix.

I sold my Indian property this year — does the T1135 still apply?

Yes, one last time. The test is ownership at any time during the year, so the year of sale is still a filing year: the property appears on Part B with its gain or loss reported, and the sale proceeds — now sitting in your NRO account — remain specified foreign property themselves until they leave India. Moving them out runs through the USD 1 million repatriation window and its certificate paperwork, which we cover in our guide to repatriating money from India. Once the funds land in a Canadian account, they stop being reportable.

What happens in the year I leave Canada and move back to India?

You still file for that final part-year if your specified foreign property exceeded $100,000 at cost while you were resident — emigration doesn't erase the year's obligation, only future ones. Be aware that leaving triggers a separate, larger event: Canada's departure tax deems most property, including Indian shares and funds (though not everything), disposed of at fair market value on exit. That, plus re-designating your Indian accounts on return, makes the exit year the one where cross-border professional advice earns its fee most clearly.