how to avoid ? (Got a tax notice? Blame your credit card)

POSTED BY dhaval thakar ON April 2, 2013 3:36 pm COMMENTS (4)

Howto avoid this?

Got a tax notice? Blame your credit card

http://www.dnaindia.com/money/1817970/report-got-a-tax-notice-blame-your-credit-card

4 replies on this article “how to avoid ? (Got a tax notice? Blame your credit card)”

  1. Sohil says:

    The reason is scrutiny parameters.Every year it differ.May be they are sending letters to people whose CC bills go past 2 lakhs and plus income parameter less than 5L.

    Once my Ca asked me to show drawing entry of above 50k as it was one of the parameter for scrutiny in pasts.Nowadays expenses as well as buyng expensive items in cash are one of the parameters.

  2. Dear Dhaval, if your income & expenses can be co-related & answered easily no reason to worry. for example your income is 10L Rs. & your C bill is 2.5L Rs. it’s fairly justified. But for a reported income of 4L Rs. & running a CC bill of 2.5L Rs. is not at all justified in normal situations.

    if you have all the statements (from CC issuer) & can produce the bills of purchases any big ticket items like LED TVs, Home thaters, …… No reason to worry from such notices.

    Thanks

    Ashal

  3. I mean how to avoid this? only by reducing CC use to 2lac?

    also….
    how to declare shopping transaction?
    also shopping using credit card is expense which we pay using bank account, so why send notice? this is not additional income.

    I dont understand why notice is sent ?

  4. bharat shah says:

    good article and useful advice. thank you.

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