AIS & Credit Card Usage Notice

[RajeshV]

There's a lot of fearmongering in here.

As long as you can properly explain your sources, there's absolutely no problem. Even the OP could be let off the hook if he could get the assessing officer to understand what he did.

If you are showing considerably lesser income than your expenses, your chances of getting a show cause notice increase considerably. However, just clearly explain to them where you got the money from and why it wasn't shown as income for the period (already taxed family wealth, rotation, etc). If you aren't clear with the taxability of your income, always approach a CA.

However, if you were hiding income sources and got a notice, you'd have to face massive penalties and it usually can't be helped.

As for AIS, it's only an information system - showing you the data that the ITD has on you. It's a boon and brought about a lot of transparancy for the people. Before this, ITD used to have all this data and you didn't even know. Heck, I've seen CAs finding out "forgotten" income of clients only because of AIS.

 

[bigbrain]

AIS is just a notice. Don't get scared if you've crossed 10l. You can always mention in the response section that bills were paid from previous years savings and you have been filing itr since past many years

Is it a note in AIS or is it a notice that I have to respond to?

I have spent close to 11 lakhs on Axis cards and about 7 lakhs on all other cards put together (3 more months pending in this FY). My ITR will be higher 35l+. My expenses on credit card has increased by ~40%+ as my family size increased, my in-laws moved in with us who have some health issues. Also started spending more on CC as I understood the benifits.

Coming out from Covid, had to host some functions and revenege travel are not helping either.

My wife is not working and father in law is retired. I am concenred with them transffering money to my account as well. Is transffering to my credit card directly a better choice? Or should I talk to a CA.

 

[Aditya12]

Is it a note in AIS or is it a notice that I have to respond to?

I have spent close to 11 lakhs on Axis cards and about 7 lakhs on all other cards put together (3 more months pending in this FY). My ITR will be higher 35l+. My expenses on credit card has increased by ~40%+ as my family size increased, my in-laws moved in with us who have some health issues. Also started spending more on CC as I understood the benifits.

Coming out from Covid, had to host some functions and revenege travel are not helping either.

My wife is not working and father in law is retired. I am concenred with them transffering money to my account as well. Is transffering to my credit card directly a better choice? Or should I talk to a CA.

Looking at your ITR i don’t know why you’re worried. Your expenses on CCs are well within your income range.

 

[phoenix1386]

Good Luck.
Kuch bhi ho G to tuttni hai.

Better from a policeman father than a policeman who is not your father. I do hope the policeman in question does not discriminate in this case.

However, I am really interested in knowing why are these transactions even being done. Why go through all this hassle?

 

[bigbrain]

Looking at your ITR i don’t know why you’re worried. Your expenses on CCs are well within your income range.

I just hate getting any kind of notice.. If there is a phobia for this, I definetly have it.

I had a ITR notice of missing 2k in 2011, even though i have paid. I have challenged the notice and still have not got a response. I worked with a CA and got a response filled but it is still it is open. I hate that feeling whenever I remember.

Are there any CA's in this group?

 

[QUIKSILVER27]

Is it a note in AIS or is it a notice that I have to respond to?

I have spent close to 11 lakhs on Axis cards and about 7 lakhs on all other cards put together (3 more months pending in this FY). My ITR will be higher 35l+. My expenses on credit card has increased by ~40%+ as my family size increased, my in-laws moved in with us who have some health issues. Also started spending more on CC as I understood the benifits.

Coming out from Covid, had to host some functions and revenege travel are not helping either.

My wife is not working and father in law is retired. I am concenred with them transffering money to my account as well. Is transffering to my credit card directly a better choice? Or should I talk to a CA.

You will get a notice only if ur income is not proportionate. It is just a note in the AIS not requiring any response from your side. So don't worry as in ur case there's nothing to worry about and I'm 99% sure u wont get a notice..

 

[bigbrain]

You will get a notice only if ur income is not proportionate. It is just a note in the AIS not requiring any response from your side. So don't worry as in ur case there's nothing to worry about and I'm 99% sure u wont get a notice..

Thanks. Appreciate your response. I will restart using axis then

 

[imdjay]

What if a housewife uses a card beyond 10L in a year and her husband has enough ITR.

 

[techt]

What if a housewife uses a card beyond 10L in a year and her husband has enough ITR.

If CC is husband's or add-on to husband's, no problem.

 

[cardio_guy]

Problem is there dear friend. When a person crosses 10L+ payment towards credit card, IT will certify that he is a rich person and gives a certificate to him. People normally use this certificate to get higher loan amount, for marriage purpose (Ladki walo ko dikhane ke liye) and to earn fame in society. 👍👍

According to our ITans, to become rich no need of any income, just pay 10L cc payment

If you pay tax more than a limit, then IT will give you certificate, that I know.
(https://incometaxindia.gov.in/Lists...e-certificate-of-Appreciation-3-7-02-2017.pdf)

But this certificate on spending 10L on CC is new to me. Never heard of that before.

By the way, what I was saying is 10L is not the cut off to categorize someone as rich. It is like below poverty line. some people spend much higher than this using CC. If IT wanted to keep some cut off, they should keep at 50L or 1cr.

 

[Deleted member 5552]

If you pay tax more than a limit, then IT will give you certificate, that I know.
(https://incometaxindia.gov.in/Lists/Press Releases/Attachments/594/PressRelease-certificate-of-Appreciation-3-7-02-2017.pdf)

But this certificate on spending 10L on CC is new to me. Never heard of that before.

By the way, what I was saying is 10L is not the cut off to categorize someone as rich. It is like below poverty line. some people spend much higher than this using CC. If IT wanted to keep some cut off, they should keep at 50L or 1cr.

🤣🤣

It's crime when we hide our income and don't pay tax.. But many card holders are there who takes money from friends and family members and use their own credit cards for utility bill payments and shoppings for them

IT cannot consider this payment as income, but these card holders also must be capable to explain these transactions which they did for friends and family members

 

[knight]

IT doesn't have any authority to decide this 🤣

oh yeah? who has it then?

 

[4uziaul]

What if a housewife uses a card beyond 10L in a year and her husband has enough ITR.

Tumhara case hai na 🤭

 

[Deleted member 5552]

oh yeah? who has it then?

Who is IT to decide our expense and spending? 😀 Are Indians money after taking permission from IT? 😀

If really people understand about the meaning of these words INCOME and TAX, people won't have any misunderstanding. People still think that we have to pay income tax for our expenses

A man who builds a house for 50 L will pay income tax of 50 L???

 

[RAMESH BABU N]

Who is IT to decide our expense and spending? 😀 Are Indians money after taking permission from IT? 😀

If really people understand about the meaning of these words INCOME and TAX, people won't have any misunderstanding. People still think that we have to pay income tax for our expenses

A man who builds a house for 50 L will pay income tax of 50 L???

Better you have some basic understanding before asking such questions.

ITD is part of GoI. Not that of any other country. And, they deal with collection of tax on incomes.

 

[knight]

Who is IT to decide our expense and spending? 😀 Are Indians money after taking permission from IT? 😀

If really people understand about the meaning of these words INCOME and TAX, people won't have any misunderstanding. People still think that we have to pay income tax for our expenses

A man who builds a house for 50 L will pay income tax of 50 L???

Nobody asked us to pay taxes on our expenses.
Expenses are tracked by IT dept to track people who spend much more than they earn (or declare.)

It doesn't make sense for a college student to spend 20L on a credit card (and it's not about spending, it's about how he got the money to repay those bills.) No Govt or legal body would recognize money rotation or make policies considering that. it's an unusual behaviour. So these people are corner cases who get caught in the crossfire.

There are plenty of people (mostly in businesses, politics and highly paid executives in small companies ), who file ITR of 10L and make foreign trips worth 1 CR every year, and drive a 70L car, by leveraging tax loopholes.

Expense tracking laws are primarily to target such people.
Although, I agree that the ways of the IT dept are not really efficient and they cause more trouble to the common man than to the actual tax evaders who deal in black money. But with the digitization of the economy and restrictions on cash transactions, there's atleast some control being implemented on how much you can spend without declaring your source of income.

 

[techt]

Nobody asked us to pay taxes on our expenses.
Expenses are tracked by IT dept to track people who spend much more than they earn (or declare.)

It doesn't make sense for a college student to spend 20L on a credit card (and it's not about spending, it's about how he got the money to repay those bills.) No Govt or legal body would recognize money rotation or make policies considering that. it's an unusual behaviour. So these people are corner cases who get caught in the crossfire.

There are plenty of people (mostly in businesses, politics and highly paid executives in small companies ), who file ITR of 10L and make foreign trips worth 1 CR every year, and drive a 70L car, by leveraging tax loopholes.

Expense tracking laws are primarily to target such people.
Although, I agree that the ways of the IT dept are not really efficient and they cause more trouble to the common man than to the actual tax evaders who deal in black money. But with the digitization of the economy and restrictions on cash transactions, there's atleast some control being implemented on how much you can spend without declaring your source of income.

Well said.. 👌

 

[anirban.choudhury]

There's a lot of fearmongering in here.

As long as you can properly explain your sources, there's absolutely no problem. Even the OP could be let off the hook if he could get the assessing officer to understand what he did.

If you are showing considerably lesser income than your expenses, your chances of getting a show cause notice increase considerably. However, just clearly explain to them where you got the money from and why it wasn't shown as income for the period (already taxed family wealth, rotation, etc). If you aren't clear with the taxability of your income, always approach a CA.

However, if you were hiding income sources and got a notice, you'd have to face massive penalties and it usually can't be helped.

As for AIS, it's only an information system - showing you the data that the ITD has on you. It's a boon and brought about a lot of transparancy for the people. Before this, ITD used to have all this data and you didn't even know. Heck, I've seen CAs finding out "forgotten" income of clients only because of AIS.

Absolutely not sure why there is so much fear about this thing.
Also why does one forget that one's annual salary is not his net worth, suppose X earns 10 lakhs in a year now and have been working for the last 10 years , why can't he spend 50 lakhs in a year ?
you need to consider your net worth too and I think IT is also not that stupid to understand this simple logic.

 

[Tejo]

Absolutely not sure why there is so much fear about this thing.
Also why does one forget that one's annual salary is not his net worth, suppose X earns 10 lakhs in a year now and have been working for the last 10 years , why can't he spend 50 lakhs in a year ?
you need to consider your net worth too and I think IT is also not that stupid to understand this simple logic.

Can do on debit cards *

Anyway we know how old our constitution is ... who will care & update about this .... ?

By the way, that notices are automatic this is also big issue.

 

[bigbrain]

Absolutely not sure why there is so much fear about this thing.
Also why does one forget that one's annual salary is not his net worth, suppose X earns 10 lakhs in a year now and have been working for the last 10 years , why can't he spend 50 lakhs in a year ?
you need to consider your net worth too and I think IT is also not that stupid to understand this simple logic.

With offence please, just my thought:
I think it is just wise to avoid being in a position where you have to explain. If one can split expenses such that you are not notified is better than being a position where you are at a mercy of the IT guy to understand and approve.

I strongly feel the same about Police or any other Govt. bodies like city administrative body, water supply board/electricity board. I want to stay away as much as possible.