A caution to people rotating money using credit cards

[shashiishot2007]

I had a lengthy discussion with my CA regarding this topic yesterday. I would request everyone who are rotating money using credit cards to be very careful in this matter.

He told me an interesting story of one of his client whose income was 25lpa but his credit card usage showed 30lpa in his AIS. The client had genuine spends as he was paying bills on belhalf of his company using his credit card and then claiming this amount later afterwards . This means his expenses got mixed up with his company expenses . The client received a notice to explain how he spent more than his income. My CA and his assisstant had to work for 8 days for each and every transaction to explain to the guys in the IT department about which the client expenses are and his company expenses are. They were satisfied with the explanation end of the day and were let off.

So moral of the story is spend/rotate money only if u have the income matching your expenses. So if u earn 10 lpa then spend only 10l using your credit cards. You will receive a notice if ur spending is more than your income. Also it will be very difficult for you and your CA to explain each and every transaction to IT department

 

[Strange]

but his credit card usage showed 30lpa in his AIS

30L spent by single bank's credit card right?

 

[sxchzy]

as long as you are able to justfy your spends it wont be a problem

 

[shashiishot2007]

30L spent by single bank's credit card right?

No. Multiple credit cards. AIS shows only the credit cards with more than 10L spent amount in 1 financial year. So any cards with more than 10L spending will show compulsorily in AIS.

 

[Strange]

as long as you are able to justfy your spends it wont be a problem

10L limit of each bank right or combined limit of all banks?

 

[Strange]

No. Multiple credit cards. AIS shows only the credit cards with more than 10L spent amount in 1 financial year. So any cards with more than 10L spending will show compulsorily in AIS.

But it's not combined spent of two banks right?

 

[shashiishot2007]

But it's not combined spent of two banks right?

No. For example if u have spent 20L in one year in both hdfc and axis then AIS will show axis separate amount of 10L and hdfc separate amount of 10L. But if u have spent 25 lakh in three separate cards then the cards which have 10L expenses will only show in ais. The third card with 5 Lakh expenses won't show in ais.

 

[Trust Me]

as long as you are able to justfy your spends it wont be a problem

I can live with having to justify my spends vs. my income, but can't even hope to be able to justify all entries in the AIS.

 

[Predator]

For anyone earning 25lpa, spending 30 lakhs in a year is not a big deal for him. Also, credit card spends of a particular year can not be tied with income of a certain year.
So, maybe there are some more details to the case which are missing like cash settlement of CC due, or high forex transactions etc. which triggered the scrutiny process.

 

[sxchzy]

yes as i said until and unless your every rs is accounted for you shouldnt have any problem

 

[brightknight]

What about paying cc bills of my dad with my debit card & taking money afterward through upi?

 

[Trust Me]

yes as i said until and unless your every rs is accounted for you shouldnt have any problem

In other words, one should have problems only when every rupee is accounted for?!

Life has become so simple and easy now!🙂

 

[neogen]

I had a lengthy discussion with my CA regarding this topic yesterday. I would request everyone who are rotating money using credit cards to be very careful in this matter.

He told me an interesting story of one of his client whose income was 25lpa but his credit card usage showed 30lpa in his AIS. The client had genuine spends as he was paying bills on belhalf of his company using his credit card and then claiming this amount later afterwards . This means his expenses got mixed up with his company expenses . The client received a notice to explain how he spent more than his income. My CA and his assisstant had to work for 8 days for each and every transaction to explain to the guys in the IT department about which the client expenses are and his company expenses are. They were satisfied with the explanation end of the day and were let off.

So moral of the story is spend/rotate money only if u have the income matching your expenses. So if u earn 10 lpa then spend only 10l using your credit cards. You will receive a notice if ur spending is more than your income. Also it will be very difficult for you and your CA to explain each and every transaction to IT department

If he was paying on behalf of a company, he must be getting reimbursed to him by company. Fail to understand what was the issue?

 

[Pankhuri]

Tbh this all could be easily avoided on your own too if you maintain a clean record of your dealings with your own company. Problem here isn't 30L spend tbh, problem here is not maintaining a proper record. This is considering CA is telling the whole story and not lying in some way or the other.

 

[sxchzy]

In other words, one should have problems only when every rupee is accounted for?!

Life has become so simple and easy now!🙂

if all your money is accounted for
if any one raises a question regarding its source you get to show where it came from

 

[sxchzy]

What about paying cc bills of my dad with my debit card & taking money afterward through upi?

read what i said above your mesaage

 

[Magnus2627]

CC info doesn't even show up in my AIS. It only shows savings/ current account and investments like MF. Is it just me?

 

[sxchzy]

CC info doesn't even show up in my AIS. It only shows savings/ current account and investments like MF. Is it just me?

if your spends are above 10L then only it will show

 

[dealminer]

rotating money using credit cards to be very careful in this matter.

So Debit card rotators are safe? 🤔

 

[Vasuki]

So Debit card rotators are safe? 🤔

Are bhai Bhai. ☺️

Sabse pehle aapne gharana nhi h