You will be asked if you are tax-exempt- and you must say "Yes". Also, if you live on a reserve.
When you start your return under Info- Citizenship- There is a question which asks- Do you have income that is exempt from tax under the Indian Act? You must click "YES".
Then once you enter your T4 slip - you will make sure that it is tax exempt by the boxes that was filled out on your slip - Status Indian (exempt income): box 69, 71 and 88 are for tax exempt.
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