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POSTED BY ON December 24, 2012 12:52 pm COMMENTS (29)
During conversation with my Dad regarding credit cards(CC), my Dad told me to take care of transaction amount in the CC. It should not cross 2 lakhs otherwise there will be inquiry in Income Tax.
In my family of 6 ppl, I am the only one with CC cards. I hold 3 cards.
All the online transaction are done by me. Sometimes payment for those is done by cheques by my dad. So want to know how Income tax and credit card are related.
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My Name is Eshwar Prasad, I have 3 cc in my name 2 in one bank 1 in another, I have 2 children who live abroad, durning their visit in recently, they used my cards for certain purchases, I also use for making payments for telephones, electricity bills and few other purchases during demonitation and I made from from sb account , which probably cross 2 lakhs from all cards, I have recived from my children for thier purchase by nre account , what is situation in my case, I am ascesse in it being senior citizen also is within 3 lakhs,
I am still not clear of the query here
Sir, I am swiping my credit card for 2lakhs regularly every month in a rice shop, the shop person charging 5000 rs as his commission, and remaining 195000 rs he is transferred to my salaryaccount.. I am not showing these transactions in my IT returns, I am salaried employees 6L per annum, can u explain me how to prepare my income tax return.
Hi Rama
This query belongs to CA domain, hence we are not the right people to comment on this issue.
I suggest you get in touch with a CA for this in your city.
We also have a CA partner incase you want to explore that, Just fill in your details here and they will give you a complimentary call back
http://jagoinvestor.dev.diginnovators.site/pro
Manish
i mean for next A/Y 17-18,IE FY 2016-17 WHEN WE WILL FILE RETURNS IN NEXT FY LIMIT HAS BEEN INCREASED FROM 2 LAKHS TO 10 LAKHS SIR I M SURE I READ IN NEWSPAPER AS PREVIOUSLY IT WAS FOR ONECREDIT CARD THATS WHY I HV DOUBT , I WANT TO CONTROL MY CARD EXP THATS WHY I WASASKING THE LIMIT SO THAT MY CASE DOESNT OPEN FOR NEXT FY IN YEAR 2017-18
Hi REKHA
Thanks for asking your question. However, I dont think I am eligible to answer your query as its either out of scope of my knowledge or its not related to money matter directly
Manish
plz tell as per latest criteria for AIR TRANSACTIONS and cases that can fall in scrutiny limit of credit card usage is inc from 2 lakhs to 10 lakhs ,so i want to know this is for one credit card or all credit cards in aggregate issued by different banks ???if it is for all credit cards then how it dept will come to know as in air transaction shall b reported by bank issuing credit card so how can all banks data will b availaible if 10 lacs limit is for not one cr card but all ,plz hlp.for eg for eg if i own 3 credit cards and my aggregate exp is abv 10 lakhs of 3 cards but individually i spend 3,4and 5 lakhs on each credit card ,so this case will b considered for scrutiny or not .???ie this limit of 10 lakhs apply for one credit card or all credit cards by different bank cos ..???
Its stil the same 2 lacs overall in credit card, not per credit card
hey plz tl i show income from job work and commission .. around 270000 and paying tax of rs 2000 and claiming rebate under 87A with tds of 3000 so CLAING REFUND OF RS 3000.. BUT USUALLY TO EARN POINTS ON CREDIT CARDS DO TRANSACTIONS OF 10000 AT FREECHARGE AND PAYT M AND TRANSFER IT BACK TO MY BANK ACCOUNT .I.E. LOAD VIA CREDIT CARD IN WALLET AND TRANFER IT BACK TO BANK ACCOUNT THIS I HV DOING FO6 MONTHS …AND TRANSFER EACH MONTH ARND RS 30000 FROM MY 3 PAYTM ACCOUNTS .. MY LAST ANNUAL USAGE OF CREDIT CARD BILL WAS RS 230000 AND TWO OTHER CREDIT CARDS OF 100000 EACH ….SO IHV PROOF THAT I DO TRANSACTIONS FOR POINTS EARNING AND SHOPPING EXP MAY B JST 25%… I M WOORIED ABT MY SCRUTINY .. WILL MY CASE B SELLECTED FOR SCRUTINY ?/ I THOUGH HAD 4 FDS OF 50000 EACH MATURING IN THIS FY 2015-16 .. ALTHOUGH I JST LOAD FUNDS AND TRANSFER THEM BACK TO MAKE PAYMENTS OF CREDIT CARD … SINCE MY CARD ABV 2LACS WL B SELECTED SO .. DO THEY TAKE A LOOK AT ALL TRANSACTIONS OF SBI AND WILL THEY JUDGE THAT MY TRANSACTIONS WRRE NOT FOR SHOPPING BUT FOR LOADING IN WALLET AND T/F IT BACK …..SHOULD I REVISE MY RETURN ACTUALLY MY INCOME IS RIGHT BUT ONLY CONCERN IS SCRUTINY AND EXPLAINATIONS AS RS 400000 CREDIT CARD TRANSACTIONS WITH 75 % USAGE ON WALLETS AND TRANSFER BACK I DIDNT KNEW ABT 200000 LIMIT WHAT TO DO ???
Hi SANCHIT
This query belongs to CA domain, hence we are not the right people to comment on this issue.
I suggest you get in touch with a CA for this in your city.
We also have a CA partner incase you want to explore that, Just fill in your details here and they will give you a complimentary call back
http://jagoinvestor.dev.diginnovators.site/solutions/ca-services
Manish
dear sir me and my friend use my credit card he is on job and he will payment from my card and he get rupees from the customer and after that he use the amount till credit card due date and pay the amount before due date id my over all transaction will be 4 lab in a financial year
will income tax department send me any notice after financial year
I suggest better not let him use your card !
Hello ,
Suppose i have spent total of Rs 190000 On my icici bank credit card in a FY , and also 150000 spent On SBI Card in the same financial Year , Both the cards Has the same PANCARD Number ,
Now , Will income tax dept. contact me ?
No , there is no basis for which the income tax dept will contact you !
Hi Dear sir
This is to bring your kind that my name is pradeep and i have axis bank credit card limit 40000 as am using this card to pay only company bills and our staff bill like power bill, mobile bill &Landline payments etc amounting to rs 35000/- becoz of i will get some cash back and credit points.
so my transaction will cross above 2 lakh in a financial year as there is a any IT Problem occurs in future.
Plz advice me as early as possible
I am not clear about the question here ?
is 2 lakh limit is total of all transcations or for only one transcation
Total
I have 4 credit card & my freinds also use my card for regularly purchase make payment.
Can i stop like this transction.
Dear Bharat,
Whilst it is not automatic, the Income Tax Department can scrutinize any account for any transaction. Of course, they typically would scrutinize larger sized transactions. As long as your payments / transactions are bonafide and the availability of cash in your account is from regular sources, you should not have any concerns even if there was to be a scrutiny.
Regards,
Credexpert
Dear Bharat, in a simple sense, if your total transaction value on each of your credit card is below 2L Rs. in A FY say 5.97L Rs. in total (1.99*3), there is no reason to worry.
As rightly pointed out to you, apart from this credit card reporting your income details ‘ll also be cross checked before calling you up.
If Dear FM’s hint is any indication, in future Govt. wants to promote card transactions & that’s why this 2L Rs. limit has been done away with.
Thanks
Ashal
Muthi Krishnan is right
http://www.rediff.com/getahead/2007/may/24tax.htm
(old article but should still be valid for scrutiny purposes)
but 2L total transactions on A credit card not all 3 of them since all your card have limit of 1.5 L you have nothing to worry
2L is total of all transactions in a financial year. each case need not necessarily result in a scrutiny, they might check other parameters along with this. If your tax return shows income well above this value, it should not be a concern. However, if a scrutiny is called for, it will not be limited to your credit card, they will check all of your accounts and is a hassle.
Thanks for the reply. Some of the transactions on the current cards belong to my family members who have their own PAN cards and their payments is done by my Dad using cheques. So I was concerned regarding payments.
single purchase. So you don’t need to worry! Of course if you max out your cards in the space of a few days with big purchases this may alert the taxman. If you are able to pay for it with legitimate money there should not be a problem even if there is scrutiny
You mean that a single transaction of 2L or multiple transactions whose total is 2L. This is a concern because all my present cards have limit which is less than 1.5L.
Each single purchase of 2L and above made with a credit card
So this 2 lakh payment or purchase limit is for each card or a total limit.
Prior to AY 2011-12, two lakh transactions by a credit card had to be declared in returns
This has been done away from AY 2011-12. This information can still be accessed by the IT dept directly from credit card comp. So a 2 lakh credit card payment can still be subject to scrutiny