Calculation of taxable exempt portions of withdrawals from an RRSP held by a status Indian.
In a situation where a status Indian contributes to an RRSP based on tax-exempt income, such that the contributions are not deductible, in our view, withdrawals of the principal would be tax-exempt. However, the withdrawal of any investment earnings should be taxed similarly to ordinary investment income.
However, in situations where the status Indian technically has RRSP contribution room, eligible retiring allowance(s), or transfers from an RPP, and payments from an RRSP principal or income) relate to income that was exempt from tax (or accorded treatment by a remission order), the payments will usually be exempt from tax.
See earlier positions.