Income tax notice on more spend on credit card than income

[gurbina]

what happens generally a credit card issuer reports it to ITD if annual bill paid is >10lacs in case of ITR filed under 10l or if annual bill paid>ITR filed,then it'll show under AIS/TIS.
so,don't use a single card for more than 10l if your ITR is less than 10l. or more than your ITR.Chances of report of combined use of cards are very rare.

So now I'm wondering what is the actual reality.

As per the actual regulation it says that it is mandatory for banks to report annual payments of more than 10L made toward credit cards, but that doesn't exclude the possibility of banks reporting below that limit as well. Your PAN is always linked to nearly any financial instrument and not just credit cards.
For some it shows up in AIS and for others it doesn't, seems like it could also be bank dependent.

I hope someone can clarify it or tell us the actual reality, and I also hope people stop making guesses and statements without due research or knowledge.

 

[deep@vie]

only problem is, the AIS is not updated and i don't know the exact cc txn amount. Your answer makes sense btw..so thanks.

I'll just avoid using any of my card these 3 months then.

yes,if one can keep combined usage under ITR filed,nothing like that. that's ideal situation.
my above statement was just for someone who's stuck & didn't have any idea.They should not panic.

 

[TheMentalist]

only problem is, the AIS is not updated and i don't know the exact cc txn amount. Your answer makes sense btw..so thanks.

I'll just avoid using any of my card these 3 months then.

yes,if one can keep combined usage under ITR filed,nothing like that. that's ideal situation.
my above statement was just for someone who's stuck & didn't have any idea.They should not panic.

Moreover, if a person is regularly filing tax returns, then he must be having savings from previous years' incomes as well. That should be enough to justify overspending a little above your taxable income.

 

[deep@vie]

yes,if one can keep combined usage under ITR filed,nothing like that. that's ideal situation.
my above statement was just for someone who's stuck & didn't have any idea.They should not panic.

Moreover, if a person is regularly filing tax returns, then he must be having savings from previous years' incomes as well. That should be enough to justify overspending a little above your taxable income.

+1

 

[jack333]

So now I'm wondering what is the actual reality.

As per the actual regulation it says that it is mandatory for banks to report annual payments of more than 10L made toward credit cards, but that doesn't exclude the possibility of banks reporting below that limit as well. Your PAN is always linked to nearly any financial instrument and not just credit cards.
For some it shows up in AIS and for others it doesn't, seems like it could also be bank dependent.

I hope someone can clarify it or tell us the actual reality, and I also hope people stop making guesses and statements without due research or knowledge.

AIS can catch anything. Once i missed 2-3k fd interest and it caught that. Everything that's digital is under the nose of AIS and IT people. Whether it shows up ultimately depends on the threshold set in the system. While AIS notice you get by March 31, IT notice may come 3-4 years later also. Just remember big brother is watching you always

 

[kshitij_0]

I have been using much more than 10 lakhs in a FY when I wasn't even earning and didn't file any ITR. I didn't face any notice issue from IT. Even some of my friends have done transactions more than 25 lakhs in a month but nobody faces any notice till date. From the previous year, I started filing ITR and in my AIS none of the banks/CCs transactions are shown. Although I am not an expert in ITR and all but from my experience what I could conclude till date is as follows
1) You have to justify the demands and statement written in your AIS in your ITR to IT dept, not matter what.
2) If some kind of notice is there it will be visible in your ITR portal and you have to justify that as well.
3) Now the golden question is which transactions are in radar of IT dept and which transactions are they most concerned of. In that what I could conclude is, if you do a lot of Cash Transactions then it is going to come under the radar of IT one or the other day. Like depositing more than 10 lakhs in your account or paying CC bills more than 10 lakhs through Cash in total in a FY. And of course if you are doing more than 20-30 lakhs even digitally every month and not filing proper ITR then it can also be problematic but mostly in this case you won't get direct notice from IT rather you will get notice from your bank and your account will get freezed till you provide satisfactory response to them, but this is not very serious like IT notice.

 

[skfc08]

correct...it incidence your add on swipe also...most of bank where total is less than 10 they not report for them it optional

 

[Deleted member 5552]

So now I'm wondering what is the actual reality.

As per the actual regulation it says that it is mandatory for banks to report annual payments of more than 10L made toward credit cards, but that doesn't exclude the possibility of banks reporting below that limit as well. Your PAN is always linked to nearly any financial instrument and not just credit cards.
For some it shows up in AIS and for others it doesn't, seems like it could also be bank dependent.

I hope someone can clarify it or tell us the actual reality, and I also hope people stop making guesses and statements without due research or knowledge.

You are right. It's all about payments towards credit card. Not about spending more than 10L.

Here people unnecessarily mislead many by telling IT notice on card spends. What happens if a credit card holder borrow money from credit card and pay the previous dues every month? IT never cares these silly matters

 

[Rohith_Kumar_Sp]

You are right. It's all about payments towards credit card. Not about spending more than 10L.

Here people unnecessarily mislead many by telling IT notice on card spends. What happens if a credit card holder borrow money from credit card and pay the previous dues every month? IT never cares these silly matters

So is it safe to keep the total CC bills paid to be less than 10L from April - March?

 

[Deleted member 5552]

So is it safe to keep the total CC bills paid to be less than 10L from April - March?

IT doesn't have any right to ask why you spent more than 10 L in a year.
But IT has full right and authority to ask you about payments that you made towards credit card because you paid it from your income.

But I am sure IT won't interfere in this silly matters unless they found some suspicious transactions

 

[Rohith_Kumar_Sp]

IT doesn't have any right to ask why you spent more than 10 L in a year.
But IT has full right and authority to ask you about payments that you made towards credit card because you paid it from your income.

But I am sure IT won't interfere in this silly matters unless they found some suspicious transactions

Which is what I'm wondering, the only way I can max benifit with my card is if I spend more than my income, but I'm also paying it with my own money, and has digital paper trail for everything, I shouldn't be worried if I spend 12-13L in an financial year but my income is 4.3L/year, given I have 3 LICs and pay all the bills, health insurance, medical insurance everything with the card. I'm not making any illegal transaction and have statements for everything.

If I'm limited to spend my card only 4.3L as its my yearly income. Then I'm giving up 60% of its benifits.

HDFC millennia has 1000 cap per month, the max I'll use it is 1Lx12 and pay other bills with Axis ACE with Gpay, should I be worried?

 

[Deleted member 5552]

Which is what I'm wondering, the only way I can max benifit with my card is if I spend more than my income, but I'm also paying it with my own money, and has digital paper trail for everything, I shouldn't be worried if I spend 12-13L in an financial year but my income is 4.3L/year, given I have 3 LICs and pay all the bills, health insurance, medical insurance everything with the card. I'm not making any illegal transaction and have statements for everything.

If I'm limited to spend my card only 4.3L as its my yearly income. Then I'm giving up 60% of its benifits.

HDFC millennia has 1000 cap per month, the max I'll use it is 1Lx12 and pay other bills with Axis ACE with Gpay, should I be worried?

I also spend more than my income. Sometimes need to rotate money, so most of the time monthly spending will be 2x of monthly income.

So, no need to worry

 

[Deleted member 9785]

People are also getting notices for wrong deduction claims in section 10.

 

[gowthamv]

what happens generally a credit card issuer reports it to ITD if annual bill paid is >10lacs in case of ITR filed under 10l or if annual bill paid>ITR filed,then it'll show under AIS/TIS.
so,don't use a single card for more than 10l if your ITR is less than 10l. or more than your ITR.Chances of report of combined use of cards are very rare.

How the CC provider will know how much ITR I have filed?