Got income tax notice for credit card spends

[friends2b11]

I have placed various orders from Flipkart with Flipkart Axis Bank credit card and after buying those orders sold them outside at lower prices.I gave the outside shopkeeper a lower price than the prize I bought.But since I got five percent cashback, I got some profit and not loss.

Besides, I have ordered many things for friends & family.(Your annual fee is waived off if you spend a certain amount on your credit card and clear the amount on time. )

Besides credit card payment showed deposit for which I have already replied with bank statement.And all the deposits were made by myself and no money was sent to anyone.

Can I now tell the income tax department that I used to run a cyber cafe and have customers there and for them I bought these things with my credit card.
Income tax department has asked me for credit card statement and which I will send them.
But income tax asked me about the payment I sent and their details and PAN number but I don't have any details.

And yes I have been filing regular income tax for 3-4 years and I show that my income is less than 5 lacs in the year.
And since I didn't file income tax on time I also paid 1000 late payment fee.


I got this notice from it dept-

Please refer to the notice under section 133(6) issued from this office and the subsequent reply made by you. Please note that as per
the Trading & Profit and Loss Account furnished by you, the total sales is Rs.18,xx,xxx/- whereas as per information, your total
payment by credit card amounts to Rs.25,xx,xxx/-. So you are requested explain the issue and submit the details of the person
(including PAN and Contact number) for whom the payment has been made. You are also requested to submit the credit card
statement for the F.Y. 2020-21. You are requested to comply within xx/xx/2023.
Response to the letter can be furnished through Compliance Portal only.

I have done a lot of shopping with credit cards for the rest of the years but since I paid the income tax on time I didn't get the notice.
Income tax notice was sent to me because I did not fill the income tax in that year but after sending the income tax notice I paid the income tax with late payment free.

To the first notice I have given the reply in due time and this is the second notice that I have been questioned again.
Now how do I give the reply to the IT department yes I will send the cc statement but how do I tell them can someone explain me so that I can give the reply properly.




the original notice which I received two to three months ago.At that time I had not filled ITR for that year and I was asked to fill revised ITR and I filled ITR with late payment fee ( 1000 INR ).

And I gave answers to the questions that were put to me and I also sent my trading PL statement statement and bank statement.

But today I got another reply to that notice.


Remaining year ITR-4 is already filed and business name is ABC Trading & Online
Nature of bussiness shown in ITR- Electronic Goods and Accessories

But since my card got canceled in the last month, I didn’t get the cashback that I earned in last month, so I didn’t have any money in my pocket.”

“The cash pack of the last month was so much more than the first two months”.So since I didn’t get the last match cashback, ultimately the cashback I earned for the first two months is no longer in my pocket.

 

[sumitlehri]

I have placed various orders from Flipkart with Flipkart Axis Bank credit card and after buying those orders sold them outside at lower prices.I gave the outside shopkeeper a lower price than the prize I bought.But since I got five percent cashback, I got some profit and not loss.

Besides credit card payment showed deposit for which I have already replied with bank statement.And all the deposits were made by myself and no money was sent to anyone.

Can I now tell the income tax department that I used to run a cyber cafe and have customers there and for them I bought these things with my credit card.
Income tax department has asked me for credit card statement and which I will send them.
But income tax asked me about the payment I sent and their details and PAN number but I don't have any details.

And yes I have been filing regular income tax for 3-4 years and I show that my income is less than 5 lacs in the year.
And since I didn't file income tax on time I also paid 1000 late payment fee.


I got this notice from it dept-

Please refer to the notice under section 133(6) issued from this office and the subsequent reply made by you. Please note that as per
the Trading & Profit and Loss Account furnished by you, the total sales is Rs.18,xx,xxx/- whereas as per information, your total
payment by credit card amounts to Rs.25,xx,xxx/-. So you are requested explain the issue and submit the details of the person
(including PAN and Contact number) for whom the payment has been made. You are also requested to submit the credit card
statement for the F.Y. 2020-21. You are requested to comply within xx/xx/2023.
Response to the letter can be furnished through Compliance Portal only.

I have done a lot of shopping with credit cards for the rest of the years but since I paid the income tax on time I didn't get the notice.
Income tax notice was sent to me because I did not fill the income tax in that year but after sending the income tax notice I paid the income tax with late payment free.

To the first notice I have given the reply in due time and this is the second notice that I have been questioned again.
Now how do I give the reply to the IT department yes I will send the cc statement but how do I tell them can someone explain me so that I can give the reply properly.

This is the original notice which I received two to three months ago.At that time I had not filled ITR for that year and I was asked to fill revised ITR and I filled ITR with late payment fee ( 1000 INR ).

And I gave answers to the questions that were put to me and I also sent my trading PL statement statement and bank statement.

But today I got another reply to that notice.

Remaining year ITR-4 is already filed and business name is ABC Trading & Online
Nature of bussiness shown in ITR- Electronic Goods and Accessories

Even if you have sale of 18 lakhs and purchases of 25 lakhs..Its of no concern..People go in losses in business also..Loss karna koi crime nahi.. I don't think income tax department has issued this notice to you because of credit card..Its been issued because your cash deposit is more than 10 lakhs and you dint file return for that financial year..Isse se attract ho jaata hai..Never do cash deposit or withdrawl or credit card spent from bank more than 10 lakhs in a year ..Yeh sab bank report karta hai phir income tax ko

 

[friends2b11]

What's your capital here according to your??

Even if you have sale of 18 lakhs and purchases of 25 lakhs..Its of no concern..People go in losses in business also..Loss karna koi crime nahi.. I don't think income tax department has issued this notice to you because of credit card..Its been issued because your cash deposit is more than 10 lakhs and you dint file return for that financial year..Isse se attract ho jaata hai..Never do cash deposit or withdrawl or credit card spent from bank more than 10 lakhs in a year ..Yeh sab bank report karta hai phir income what

Even if you have sale of 18 lakhs and purchases of 25 lakhs..Its of no concern..People go in losses in business also..Loss karna koi crime nahi.. I don't think income tax department has issued this notice to you because of credit card..Its been issued because your cash deposit is more than 10 lakhs and you dint file return for that financial year..Isse se attract ho jaata hai..Never do cash deposit or withdrawl or credit card spent from bank more than 10 lakhs in a year ..Yeh sab bank report karta hai phir income tax ko

What should I do now bro ?

 

[AritraSaha]

🙏🙏🙏🙏🙏🙏🙏🙏🙏🙏🙏🙏🙏🙏🙏

Mera ak hi suggestion hoga koyi income tax officer ki beti se shadi kar lo ... Nahi too gopal sharma vai ki CA ko pakdo 😎

Are guruji atna dino bad? Kaha tha?

 

[sumitlehri]

What should I do now bro ?

Firstly dont panic and dont take stress..Yaha log crores mei chupa lete hai unko kuch nahi hota ..tumhre tuh kuch transaction hi nahi hai..You should answer it point wise..And dont mislead income tax department..Hire a ca and usko sach jaise jaise tha waise bata dena..Dont cook any fake stories...They will compute tax and if any tax comes up ,you have to pay with interest n penalty to income tax which i dont think wont be a major amount in your case..Though ca can charge you big amount like 10 20 k coz he has to get it into details now..
For future,never deal in cash..Cash par hi nazar hoti hai income tax department ki

 

[Jhon Anand]

Sorry if this question is dumb.

In his situation, Can he just simply explain that he paid the amount through CC to help his friends?

I mean, his friends (maybe customers) wanted a phone. They didn't have a CC. So they asked him to help with the purchase.

For example, Let's consider him to be X.

A friend of X wanted a mobile phone for 20k. He didn't have a CC. So he paid 20k to X. X used the 20k to order a mobile phone.
In this case, Money in = Money out, right?

So if IT asks what is the source of 20k, he can just point out that his friend gave him 20k to place an order.

This is clearly against CC T&C, but since money in = money out, IT problems can be solved.

Am I missing something?

You know that any amount over 50k in a year recieved from anyone except family is taxable irrespective of the reason?

 

[Predator]

Bro, it's not a big deal. The bone of contention here is Cash transactions.
You purchased a product for Rs X and Sold for Y and Earned a commission of Rs (Y-X)
Now this commission is your income.
Just make fake invoices of those cash entries in some random ppl name and attach their Adhar+ PAN (KYC documents) and present these bills along with Sales record maintained by you.

Earlier you manufactured spends, now simply manufacture documents for them.

 

[ltf4ever]

why is this community helping tax evasion?
op spent more than income, earned 5% on the transactions, IT guys are asking to submit proof.
OP is a buzz member trying to further mislead IT dept saying cyber cafe, etc.
I am sure @TechnoFino and other esteemed moderators would never give out such advice on any forum that they are active on.
guide the OP properly about the next steps to declare and pay the dues.

do we want technofino site to turn up on their search results when people try to search for tax evasion methods?

 

[ashwinkashwink is verified member.]

OMG another one 😳

 

[techhdate]

cash deposits bellow 50k is not reported to IT right? since it doesnt need pan number to deposit bellow 50k

 

[Tejo]

cash deposits bellow 50k is not reported to IT right? since it doesnt need pan number to deposit bellow 50k

If you deposit, evn multiple times less than 50k also banks will report to IT, If deposits cross 50k above in a month.

Tip: Open bank ac will all banks and deposit below 50k. Not sure about the this, try and inform If its works. 🤣🤣🤣

 

[rp0703]

why is this community helping tax evasion?
op spent more than income, earned 5% on the transactions, IT guys are asking to submit proof.
OP is a buzz member trying to further mislead IT dept saying cyber cafe, etc.
I am sure @TechnoFino and other esteemed moderators would never give out such advice on any forum that they are active on.
guide the OP properly about the next steps to declare and pay the dues.

do we want technofino site to turn up on their search results when people try to search for tax evasion methods?

How is it tax evasion? It's not like he earned 10 lakhs and showed only 3 lakhs.
Also how he has spend more than his income? Infact I would say he had showed more income than he actually earned.
CC is kinda loan and OP used that money to buy products and sold those products for little gain. That's what every business do.

Only mistake OP did is he did not maintained proper accounting records. He made CC payments of 25 Lakhs but showed sales of only 18 Lakhs.
My advice would be to hire CA and complete your accounting records and give proper reply.

 

[techhdate]

If you deposit, evn multiple times less than 50k also banks will report to IT, If deposits cross 50k above in a month.

Tip: Open bank ac will all banks and deposit below 50k. Not sure about the this, try and inform If its works. 🤣🤣🤣

thats what i do in rare occasion when i have cash to deposit..ill visit deposit machine and deposit 49000 in different banks..i dont know if that works too but dint have any problems so far

 

[Deleted member 5552]

Even if you have sale of 18 lakhs and purchases of 25 lakhs..Its of no concern..People go in losses in business also..Loss karna koi crime nahi.. I don't think income tax department has issued this notice to you because of credit card..Its been issued because your cash deposit is more than 10 lakhs and you dint file return for that financial year..Isse se attract ho jaata hai..Never do cash deposit or withdrawl or credit card spent from bank more than 10 lakhs in a year ..Yeh sab bank report karta hai phir income tax ko

It's not only cash deposit, IT asked to send credit card statement also. IT will surely verify his card statement and payments made to his card. If IT found that he made payment of large amount, he will have to prove the income source. (IT doesn't have any authority to raise questions regarding our credit card spends, but IT has full right to disturb us or ask proof regarding payments which made to our card)

I think he can prove this by submitting relevant documents of people who deposited money to his account. Anyway, a professional CA can easily handle this 👍

 

[onlineramarao]

Bro, it's not a big deal. The bone of contention here is Cash transactions.
You purchased a product for Rs X and Sold for Y and Earned a commission of Rs (Y-X)
Now this commission is your income.
Just make fake invoices of those cash entries in some random ppl name and attach their Adhar+ PAN (KYC documents) and present these bills along with Sales record maintained by you.

Earlier you manufactured spends, now simply manufacture documents for them.

Were you asked by any shop keeper at any time while buying a item for less than 50k?

 

[onlineramarao]

why is this community helping tax evasion?
op spent more than income, earned 5% on the transactions, IT guys are asking to submit proof.
OP is a buzz member trying to further mislead IT dept saying cyber cafe, etc.
I am sure @TechnoFino and other esteemed moderators would never give out such advice on any forum that they are active on.
guide the OP properly about the next steps to declare and pay the dues.

do we want technofino site to turn up on their search results when people try to search for tax evasion methods?

Is there any rule that "we need to earn monthly/yearly to spend?"

 

[Deleted member 11974]

why is this community helping tax evasion?
op spent more than income, earned 5% on the transactions, IT guys are asking to submit proof.
OP is a buzz member trying to further mislead IT dept saying cyber cafe, etc.
I am sure @TechnoFino and other esteemed moderators would never give out such advice on any forum that they are active on.
guide the OP properly about the next steps to declare and pay the dues.

do we want technofino site to turn up on their search results when people try to search for tax evasion methods?

there has been no nobality in paying taxes
you are just a cow that the govt is trying to milk
and i personally beleive taxation is theft
especially when the 50% of the members of parliament have criminal cases pending on them
i do not beleive any government to be competant enough to deserve 30-40% of my hard earned money

 

[Predator]

Were you asked by any shop keeper at any time while buying a item for less than 50k?

No

 

[ltf4ever]

How is it tax evasion? It's not like he earned 10 lakhs and showed only 3 lakhs.
Also how he has spend more than his income? Infact I would say he had showed more income than he actually earned.
CC is kinda loan and OP used that money to buy products and sold those products for little gain. That's what every business do.

Only mistake OP did is he did not maintained proper accounting records. He made CC payments of 25 Lakhs but showed sales of only 18 Lakhs.
My advice would be to hire CA and complete your accounting records and give proper reply.

Is there any rule that "we need to earn monthly/yearly to spend?"

no, but there is definitely a rule against manufactured spend, money rotation, manufacturing the existence of a cybercafe to show 'customers', forging documents (not OP but another suggestion given by a member in this thread), using personal cc for business spends, etc.

there has been no nobality in paying taxes
you are just a cow that the govt is trying to milk
and i personally beleive taxation is theft
especially when the 50% of the members of parliament have criminal cases pending on them
i do not beleive any government to be competant enough to deserve 30-40% of my hard earned money

classic whataboutism. you are like the woke uncles and aunties who get caught in trains travelling without tickets, and when asked for paying a fine, ask the TTE to first collect crores in fine from biggies like Mallya then come to them to ask for a fine. anyways to each his own, you can evade IT dept and revolt against the taxation policies as much as you want, but giving others advise on how to do it on a public platform is criminal. elect better candidates next time and then get the taxes lowers legally rather than stealing from the govt and be a burden on other taxpayers.

 

[chasni]

no, but there is definitely a rule against manufactured spend, money rotation, manufacturing the existence of a cybercafe to show 'customers', forging documents (not OP but another suggestion given by a member in this thread), using personal cc for business spends, etc.

Source for this. Is this an IT rule or Bank's rule? I would like to know more details.

 

[ltf4ever]

Source for this. Is this an IT rule or Bank's rule? I would like to know more details.

forgery and misleading govt agency should be IPC 420 /NAL. others you can find in MITC of every bank's credit card page.