4. Income tax rate → marginal tax rate
You know that in India, income tax is levied only by the central government and never by the state governments, so that you pay income tax at what is often called the ‘pallet tax rate’ based in your annual income.
In Canada, the speed at which you might be taxed in your last dollar earned is your marginal tax rate. Both the federal government and provincial/territorial governments have income tax rates for various tax brackets, and Canadians pay taxes to each. For example, if you happen to earn $75,000 annually in Ontario, your marginal tax rate will likely be 29.65% starting within the 2023 tax yr. If you must learn more about how taxes work in Canada, here’s a short video from the National Bank: “How do tax rates work?”
5. Constant monthly installment (EMI) → loan payment
When you’re taking out a loan in India, you’ll be wanting to know your EMI (equated monthly installment) amount – the fixed amount you will have to pay every month throughout your loan. In Canada, nonetheless, your fixed loan repayment amounts and any additional payments you make are simply known as “loan payments.” In your loan agreement, this will appear as a more specific term, comparable to “car payment,” “credit card payment,” or “mortgage payment.”
6. CIBIL Score → credit-worthiness
In each Canada and India, you might have a credit rating. In India, it is often called a “CIBIL score,” after the Credit Information Bureau (India) Ltd. In each countries, your credit rating is a number between 300 and 900 that indicates your creditworthiness, or how likely you might be to make your loan and other repayments on time. The higher your rating, the higher for you.
Your rating in each countries relies on several aspects, including your repayment history, your credit utilization ratio, the length of your credit history, the varieties of loans you might have, and the variety of “hard checks” of your credit report by lenders. Your credit rating helps determine what loans you’ll be able to get and what rates of interest lenders can give you. Although credit scores are necessary in each countries, in Canada your rating is critical to your financial health as a result of the credit-based nature of the economy.
As a newcomer to Canada, you will not have a credit rating to start with, as credit scores aren’t transferable between countries. You can start constructing a credit history by getting a bank card and paying off the balance in full every month. And to keep up a healthy credit rating, attempt to limit your credit usage to 30% of total available credit.
7. S&P 500 → S&P500
Once you earn enough to satisfy your needs in Canada, you’ll have money left over every month to make use of toward long-term financial goals like retirement. Many Canadians spend money on the stock market, often through some variety of investment vehicle that provides small shares in multiple stocks, comparable to exchange-traded funds (ETFs) or mutual funds. These pooled investments offer greater diversification than buying individual stocks.
Residents and residents of Canada have access to the Canadian and US stock markets, so that you will often come across stock market indices just like the S&P 500 (US) or the S&P/TSX 60 (Canada). If you might have invested in India, you might be probably aware of stock market indices just like the S&P BSE Sensex or the NSE NIFTY 50. As a fast reference, the S&P 500 is just like the S&P BSE 500 – it represents the five hundred largest firms by market capitalization on the stock market; and the S&P/TSX 60 is just like the NSE NIFTY 50 in that they only track 50 to 60 of the most important stocks by market capitalization. To find ETFs to your portfolio, use MoneyDown’s ETF Screener.
