GIFT City Funds for Canada NRIs: Eligibility, T1135 and Tax (2026)
By Anup Vatyani, AMFI-registered Mutual Fund Distributor (ARN 106715)
Last reviewed October 2026
The short answer. Some GIFT City funds do not accept Canadian residents, so eligibility is the first check. Where a fund accepts you, Canada taxes your worldwide income, half of a capital gain is taxable, and foreign property costing more than CAD 100,000 must be reported on Form T1135. Canada's offshore fund rules can also apply, so take advice before investing.
Canada NRIs and GIFT City: key facts
| Currency | Canadian dollar; most GIFT City funds are in USD |
|---|---|
| Canadian tax on your investment | Yes, on worldwide income; 50% of capital gains is taxable |
| Yearly reporting | Form T1135 if foreign property cost exceeds CAD 100,000 at any time in the year |
| LRS or TCS? | No. Those apply only to resident Indians. |
| Main thing to check | Whether the fund accepts Canadian residents |
| Tax treaty with India | Yes; credit for Indian tax is usually available |
How to invest in GIFT City from Canada
- 1
Check Canadian eligibility
Some funds say no
- 2
Ask a Canadian tax adviser
Including section 94.1
- 3
KYC with the fund house
Passport, address proof
- 4
Transfer USD from Canada
Or CAD converted
- 5
Keep records in CAD
For T1135 and gains
Which GIFT City funds accept NRIs in Canada?
Based on each fund house's published eligibility, checked 24 October 2026. Offer documents can add conditions, and most exclude sanctioned or FATF-listed countries, so confirm with the fund house before you apply. Listing is not a recommendation.
Tata India Dynamic Equity Fund's website excludes US persons; its 2025 presentation also mentions Canada, so Canadian residents should confirm with Tata directly.
Lower minimums (USD 500 to USD 10,000)
- ABSL India Growth Fund (Aditya Birla Sun Life, inbound): USD 500, then multiples of USD 100.
- Edelweiss US Technology Equity Fund (Edelweiss, outbound): USD 5,000; top-ups USD 500.
- Marcellus Global Equities Fund (Marcellus, outbound): USD 5,000; top-ups USD 2,000.
- Parag Parikh India Flexi Cap Fund (listed as coming soon) (PPFAS (Parag Parikh), inbound): USD 10,000; top-ups USD 1,000.
- Sundaram India Mid Cap GIFT (Sundaram, inbound): USD 5,000.
- Tata India Dynamic Equity Fund (Tata, inbound): USD 500.
AIFs and restricted funds (higher minimums)
- Bandhan India Large and Mid-cap Fund, India Small Cap Fund and India Government Securities Fund (IFSC) (Bandhan): Not published; ask the fund house.
- HDFC India Flexi Cap, Balanced Advantage, Midcap Opportunities, Small Cap, NIFTY 50 and Diversified Equity FOF (HDFC): Above USD 150,000 (Class A) or above USD 50,000 (Class AR, not for US or UK investors).
- Mirae Asset Global Advantage Fund (Mirae Asset): USD 151,000; USD 25,000 for accredited investors.
- Motilal Oswal GIFT City India Equity Fund of Funds (Motilal Oswal): USD 150,000.
- Nippon India Large Cap Fund GIFT (Nippon India): USD 150,000.
- Phillip India Billion Opportunities Fund (Phillip Capital): Not published; ask the manager.
- Rangoli India Fund (Unifi Capital): Not published; ask the manager.
Funds that say they do not accept Canada residents
- Edelweiss Greater China Equity Fund (Edelweiss). Source
- The Wealth Company IFSC FoF (The Wealth Company). Source
Full details, minimums and sources: GIFT City fund list.
How Canada taxes GIFT City funds
- Canadian residents are taxed on worldwide income. Distributions are taxable when received, and 50% of a capital gain is included in income. A proposed increase to two-thirds was cancelled in March 2025.
- If the total cost of your specified foreign property, including GIFT City fund units and foreign accounts, exceeds CAD 100,000 at any time in the year, you generally file Form T1135.
- India and Canada have a tax treaty; Indian tax on the same income can usually be credited.
Canada's offshore investment fund rule
Section 94.1 of the Income Tax Act can add a deemed amount to your income each year for an interest in a non-resident fund that mainly holds portfolio investments, if one of the main reasons for the investment is to pay significantly less Canadian tax. Whether it applies depends on the facts, so ask a Canadian tax adviser before investing.
Indian tax for NRIs in Canada
Many GIFT City funds are structured so that non-resident investors bear little or no Indian tax, with tax handled at the fund level; the treatment depends on the fund, so ask for it in writing. Your Indian residential status decides the rest: you are generally non-resident if you spend fewer than 182 days in India in the financial year, but a 120-day test applies if your Indian income exceeds ₹15 lakh. See GIFT City taxation.
Documents NRIs in Canada are usually asked for
- Passport (and OCI card if you are a Canadian citizen of Indian origin)
- Canadian address proof
- PAN, if you have one
- Canadian SIN or tax number for CRS self-certification
- FATCA and CRS self-certification
Build your own list with the document checklist.
Sending money from Canada
Transfer US Dollars from a Canadian bank's USD account, or convert Canadian dollars through your bank. Your return in Canadian dollars depends on the fund's markets, USD/CAD and, for inbound funds, the rupee. Record the CAD cost of each purchase on the day you buy. See also moving country if you may return to India.
Other countries
Guides for the UAE, the UK, the US, Singapore and Canada, and the Gulf and Australia on the main GIFT City for NRIs page.
Common questions
Can NRIs in Canada invest in GIFT City funds?
Only in funds that accept Canadian residents. Edelweiss Greater China Equity Fund and The Wealth Company IFSC FoF state that they do not, and Tata's material also mentions Canada. Confirm eligibility in the offer document before applying.
How are GIFT City funds taxed in Canada?
Canadian residents are taxed on worldwide income: distributions when received, and 50% of capital gains. Section 94.1's offshore investment fund rule can sometimes add deemed income. Indian tax can usually be credited under the treaty.
Do I need to file T1135 for a GIFT City fund?
Yes, if the total cost of your specified foreign property, including the fund units, exceeds CAD 100,000 at any time in the year.
Is there currency risk for Canadian investors?
Yes. Most GIFT City funds are in US Dollars, so your return in Canadian dollars moves with USD/CAD, and for inbound funds also with the rupee.
Official sources
Rules change. Check the current position with the authority that sets it.
- Canada Revenue Agency — Form T1135 questions and answers — Reporting foreign property costing more than CAD 100,000.
- Canada Revenue Agency — Line 12700 Capital gains — How Canadian residents report capital gains.
- Justice Laws — Income Tax Act section 94.1 (offshore investment fund property) — Canada's rule that can impute income on certain offshore fund holdings.
- Income Tax Department, Government of India — The Income-tax Act, including Section 10(4D), and TCS rules.
- IFSCA Directory of regulated entities — Check that a Fund Management Entity is registered.
Have a question about how this works?
Anup Vatyani explains GIFT City fund structures and the investment process in plain English. Educational conversation only, not personalised advice.
Talk to AnupThis page is educational and is not investment, tax or legal advice. Figures and rules are as understood at the date shown and can change; check the official sources and the scheme's offer documents. Investments are subject to market risks; read all scheme-related documents carefully.