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What happens if gains on the stocks in my TFSA exceed my contribution room? Am I penalized?



Our response:

There are limits on contributions to a Tax-Free Savings Account (TFSA). The total contribution you have depends on factors including the year you first were able to contribute to a TFSA, and withdrawals you have made from your TFSA. Learn more about how TFSAs work.

Growth on your investments inside a TFSA does not affect your contribution room, and you can take money out when you want, for any reason, without paying any tax. If you take money out, you can re-contribute it the following year, in addition to the annual maximum. There are penalties for over-contributions. If you are not sure how much contribution room you have, contact the Canada Revenue Agency.

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