High Value Transactions Via Credit Card

[curioussoul]

Hello All,

I kind of messed up with this but I have credit card spend which is 3 times my income. Income is around 38lakhs and CC spend of about 1.1 Cr. This was mostly as I had to clear lot of debts and had to rotate the credit card payment every month out of desperation. I have received measage from IT dept for verifying high value transactions. What should be my best course of action hereon, very likely there may be a notice soon to explain the CC transactions.

 

[Deleted member 11974]

consult a ca

 

[coolguy1]

Reaching out to a CA must be the next step on priority.

Spending 1.1 crores and earning 1.1 crores are two totally different things and the government will think of the former until you provide documentation and proof of the latter. Some members here might help but again since this could make or break your future, I suggest seeking professional help to be absolutely sure and avoid any issues in the future!

 

[chasni]

If you're spend was reported as 1.1 crores it means you spends were more than that amount as only payments more than 10 lacs are reported on cards. The only option is to contact a capable CA and draft a proper reply instead of trying to reply at your end.

 

[vijaypathak077]

but does CA understand CC rolling? I contacted CA, He replied that you need to show it in your income head and pay tax.

 

[Deleted member 11974]

it isnt an income as you never earned it
it would be different if your cashback earned is more than a certain limit and that is taxable

 

[chasni]

but does CA understand CC rolling? I contacted CA, He replied that you need to show it in your income head and pay tax.

Find another CA. By this logic, one should also pay tax on loan amount that you take to buy a car or house.

 

[DealHunter786]

Hello All,

I kind of messed up with this but I have credit card spend which is 3 times my income. Income is around 38lakhs and CC spend of about 1.1 Cr. This was mostly as I had to clear lot of debts and had to rotate the credit card payment every month out of desperation. I have received measage from IT dept for verifying high value transactions. What should be my best course of action hereon, very likely there may be a notice soon to explain the CC transactions.

Do you have any additional income other than the salary (which I assume is your income)? If so, did you pay advance tax for this FY?

 

[curioussoul]

Do you have any additional income other than the salary (which I assume is your income)? If so, did you pay advance tax for this FY?

Nope , source is salary and some interest from FD and SB. Tax has been duly paid for all of this. The rotation was to clear my debt and I would pay one CC bill with other and so on. And it piled up because of this.

 

[DealHunter786]

Nope , source is salary and some interest from FD and SB. Tax has been duly paid for all of this. The rotation was to clear my debt and I would pay one CC bill with other and so on. And it piled up because of this.

I also kind of do the same but technically the cc rotation shouldn't be a problem and should not attract additional tax as apps like Mobikwik provides this service for a fee.. we can be honest here and hopefully these tricks are patched at the earliest Also whatever income you might have earned due to the rotation like excess funds parked in FD/SB would have earned interest and I understand you have already paid advance tax for those interest amounts.
So just make sure you give a proper response. Also for others' benefit, if you could share the message you received, it would be helpful.

 

[curioussoul]

I also kind of do the same but technically the cc rotation shouldn't be a problem and should not attract additional tax as apps like Mobikwik provides this service for a fee.. we can be honest here and hopefully these tricks are patched at the earliest Also whatever income you might have earned due to the rotation like excess funds parked in FD/SB would have earned interest and I understand you have already paid advance tax for those interest amounts.
So just make sure you give a proper response. Also for others' benefit, if you could share the message you received, it would be helpful.

I have not received any notice yet. Just the sms to check AIS and verify the high value transactions like many others. I am just anticipating that there maybe a further notice given the expense shown according to AIS(actually its rotation but AIS says expense) is thrice the income. So just want to be prepared in case they send a notice.

 

[varun__goel_]

Hello All,

I kind of messed up with this but I have credit card spend which is 3 times my income. Income is around 38lakhs and CC spend of about 1.1 Cr. This was mostly as I had to clear lot of debts and had to rotate the credit card payment every month out of desperation. I have received measage from IT dept for verifying high value transactions. What should be my best course of action hereon, very likely there may be a notice soon to explain the CC transactions.

If it is all rotations, then no need to worry, as you can give your card & bank statements along with a letter explaining about rotations and reason. This should not create a tax liability for you.

 

[pothi]

Spending 3 times your income wouldn't attract an attention except if this is your first year of income. Banks (and NBFCs) give us loans to spend more than what we earn. That's how they make money. You deserve to spend more and more depending on your credit profile.

You seem to be just scared because you don't know how to explain this. No worries. You haven't committed a crime. As others suggested already, all you need is... to spend some more money as consulting fee for a professional CA. Auditors have seen crores. You just have to be relax when you meet an auditor. Otherwise, they might make advantage of your situation as well. Good luck.

 

[vivdwive]

People telling spending so much doesn't attract attention are failing to understand the attention is not for the spends but for the actual income he got this financial year not just salary and bank TDS ...which can be something hidden or known to us or Tax dept but hum and also would be including the cashback/rewards he gained ...which also makes it different from the analogy of home loan as given here....go to CA or not u certainly will have to pay some additional tax than u filed.

And as far as notice is concerned, consider AIS sms as the modern day notice itself

 

[pothi]

Quicko has qna.tax forum that you might want to make use of, until you find a professional auditor.