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I had a question on making NRE fixed deposits in India from the funds from the TFSA account. The TSFA guidelines says that the investment returns and withdrawal made from TFSA account is tax-free in Canada.
My question is on the interest on the NRE fixed deposits that are generated. India doesn't tax the interest on NRE deposits. If the funds invested in NRE account is through the Canada TFSA, will that imply that Canada will also not tax the interests gained from fixed deposit investment. Please advise.
Sorry, just forgot to mention that I want to leave the investments in India and not have them converted back to CAD in the TFSA account. If the interest in such cases is tax-free, how will I be able to declare the Interest gained in INR and yet be tax free while filing my Canadian returns for the year.
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