Income Tax Notice on credit card usage!!

[Sachs]

I have heard that if you spend more than 10 L on a credit card in a year, the CC company is required to report it to income tax department.
I have a alot of cards whose maximum benefit I have calculated after watching technofino videos. I have also used yaper recently & I have realized that they have created a safe system (albeit a very hassle filled one for credit card users.)
I was wondering what will happen if I spend 9.5L on all of my 11 cards. Will I be served a notice because I have spent 104L on my cards.
OR
Will I be not served any notice as my spending on any card has not crossed 10 L??

 

[bhushan0101]

If you did receive it how do you even value rewards earnings? They're not monetary.

Even the value depends highly on the redemption.

You can convert rewards value in monetary term as per your normal usage. If you can explain it properly then everything possible.

 

[gurbina]

You can convert rewards value in monetary term as per your normal usage. If you can explain it properly then everything possible.

Yeah... I don't know how this is managed, but guessing it is a bad idea, not sure about how the assessment office will take it without supporting evidence. Anyhow I thought they would ignore these rewards unless they're monetary.

Anyhow found this article related to that, however I can't read it

Loyalty points on credit card, wallet money not to attract TDS

Tax Deducted at Source will apply only on rewards come from business or profession

www.thehindubusinessline.com

 

[Quiksilver27]

this is what its about.. @gurbina

 

[anishdacool]

The chances are very less. However inorder to be extra safe you can avoid spending more than 10 lacs on 1 bank's card to avoid SFT reporting and IT office will not get the data of your spends

Does the 10L limit apply to prepaid cards too?

 

[RAMESH BABU N]

Logically speaking, yes.
Probably, the PPI issuers/managers also must have got suitable instructions to fall in line... Or else....

 

[anujdit]

I have heard that if you spend more than 10 L on a credit card in a year, the CC company is required to report it to income tax department.
I have a alot of cards whose maximum benefit I have calculated after watching technofino videos. I have also used yaper recently & I have realized that they have created a safe system (albeit a very hassle filled one for credit card users.)
I was wondering what will happen if I spend 9.5L on all of my 11 cards. Will I be served a notice because I have spent 104L on my cards.
OR
Will I be not served any notice as my spending on any card has not crossed 10 L??

All credit cards are linked to PAN card and if expenses are more than ITR then notice probability will be higher

 

[isthisme]

Can anyone give me a TLDR;
i have some questions:
1. So the 10L limit is including all the spending on cards of a single bank.
(apay icici+ coral= 10L),
(Sbi simplyclick+cb card= 10L), etc.
On a single pan.

2. Or, is it overall spending limit? Like SBI+ICICI+AXIS = 10L ?

Please clarify this with sources if possible.

 

[NABNAB is verified member.]

Can anyone give me a TLDR;
i have some questions:
1. So the 10L limit is including all the spending on cards of a single bank.
(apay icici+ coral= 10L),
(Sbi simplyclick+cb card= 10L), etc.
On a single pan.

2. Or, is it overall spending limit? Like SBI+ICICI+AXIS = 10L ?

Please clarify this with sources if possible.

As per 1.

Though they have data as per 2 as well, it depends on whether they use it or not.

 

[TheBOSS]

The risk management system of ITD will capture transactions with disproportionate expenses as compare to the income reported in ITR. So yeah, very high spend not backed by income in ITR can be a reason to trigger the automated notice for scrutiny.
For a proprietor doing expenses of business from own credit card is not an issue (for income tax) as payment/reimbursement of the same by business cannot be treated as his personal income as there is a single PAN card for a proprietor or its business. However this will be against the norms of credit card issuing bank.
Like someone said, the SFT reporting limit is 10 lacs and since interbank data is not aggregated as of now, AIS will not report transactions on multiple banks cards.
For transactions done for family/friends, ensure to have sufficient documentary evidence to satisfy ITO later on. IT notice for tax amount >1 Lakh can be issued for 7 years and they recover tax + Interest +penalty.
However, 95% cases will not have a major issue because scrutiny transactions are very limited as IT office does not have sufficient staff to issue notices to everyone.

I don't file income tax returns.
If I have spend 8-10 lakh from my credit card and later on all transactions is refunded in same billing cycle, can this also attract income tax notice ?

 

[NABNAB is verified member.]

I don't file income tax returns.
If I have spend 8-10 lakh from my credit card and later on its refund in same billing cycle, can this also attract income tax notice ?

Yes, it may.