Tax free income ?

Almost all types of income are subject to income tax. However, there are some exceptions. Lottery winnings in Canada and gains from casual gambling are not taxable. Proceeds from damage awards are generally tax-free and, under certain circumstances, income earned on damage awards for taxpayers under 21 years of age is also exempt until the taxpayer turns 21.Various defined payments to war veterans are also exempt.

Although Workers’ Compensation (WSIB) benefits and welfare payments are not directly subject to tax, the amounts are included in your net income (but not taxable income) for purposes of determining your eligibility for certain tax credits.

If you’re in receipt of pension income from a foreign country, you may be eligible to claim an offsetting deduction from income. This will depend on the terms of the tax treaty between Canada and that country.

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