Do I have to pay taxes?
When your money is in an RDSP, you do not pay tax on it.
When you begin to take money out of your RDSP, you have to pay tax on part of it. Your financial institution will probably do a tax calculation and send the tax directly to the federal government. Then, when you file your taxes at the end of the year, you might get some of that money back.
Which part of the RDSP is taxed?
The government considers every dollar withdrawn from an RDSP to be made of three parts: private contributions, government contributions, and income/growth. When you withdraw money from an RDSP, private contributions are not subject to tax. Both federal contributions (grant and bond) and income/growth count as income. You will have to pay tax on them.