Federal Tax return in Canada is taken care of by Canada Revenue Agency or the CRA. Fiscal year in Canada is from April 1st to March 31st. There are different dates assigned for tax return in Canada. For instance, tax returns for individuals ought to be filed within 30th April. Individuals who are self employed are required to file tax return by 15th June. Usually the dates allotted for tax return in Canada need to be complied with, however in dire circumstances, as per the Interpretation Act, the dates may be shifted to the following working day if the filing day is a holiday. Restrictions are also eased in case of natural calamities or unforeseen events.
Provincial Tax return in Canada:
With regard to the provinces, every effort is made to keep a parity with the federal government in filing returns for the convenience of the people. The provinces usually abide by Income Tax Acts belonging to their own provinces. An amalgamation of the provincial as well as the federal system is used for filing tax returns in most of the provinces. As a result, people are indirectly paying the federal government. Personal income tax of the people of Quebec are collected by the provincial government in Quebec. Income tax of the corporations are also collected by the provincial government in Quebec. The government in Ontario as well as Alberta collect corporate income tax on their own. Filing of tax return in Quebec is done with Ministère du Revenu du Québec.
Circumstances under which tax return in Canada is to be filed:
There are many circumstances under which tax return in Canada is filed either with the Canada Revenue Agency or the provincial government. Given below is a list of various circumstances, which require an individual to file tax return in Canada.
- To file tax return pertaining to earnings from Canada pension plan. In this context one is required to take into account ones worldwide income also.
- A request from the Canada Revenue Agency or the CRA necessitates filing of tax return in Canada.
- Selling off ones capital property during the fiscal year also requires an individual to file tax return in Canada.
- Withdrawing money from RRSP or Registered Retirement Savings Plan under the Lifelong Learning Plan or Home Buyers Plan necessitates the filing of tax return in Canada.
There might be circumstances when an individual may not be required to file tax returns. However, experts often say that despite that if one files tax returns, it would prove to be advantageous.
Advantages of filing tax return in Canada:
- One would have the advantage of availing refund as tax was withheld from ones income.
- Credit pertaining to refundable tax is provided by the provincial government as well as federal government even though an individual is not entitled to pay tax. In this context, one cannot ignore the Working Income Tax benefit.
- If a senior citizen is receiving Guaranteed Income Supplement or GIS, the scheme gets renewed by default in the event when he files tax return.
- If an individual is interested in applying for registration with Canada Child tax Benefit or if someone wants to continue receiving the payments under this plan, filing tax return is mandatory.
- The non capital loss of an individual can be carried back to the previous years or can be carried forward to the forthcoming years.
- An individual may not want to make any contribution in RRSP or Registered Retirement Savings Plan presently but he has “earned income” for the RRSP. This can be taken forward for an indefinite period.