Axis Magnus Magnus Doubt (Income Tax AIS Notice)

[Sherwin]

I have salary of 9 lakh CTC.... If I try to apply Axis Magnus... Suppose it get approved...
My question is...
There is spending milestone of 15 lakh per year to avoid Annual fee...
Somewhat if I achieved that 15 lakhs or atleast 11 lakh...

What about the status of Income Tax AIS notice here???

 

[sxchzy]

You will be asked to justify your spends which if you are should not be a problem

 

[VijayflyRaven]

I have salary of 9 lakh CTC.... If I try to apply Axis Magnus... Suppose it get approved...
My question is...
There is spending milestone of 15 lakh per year to avoid Annual fee...
Somewhat if I achieved that 15 lakhs or atleast 11 lakh...

What about the status of Income Tax AIS notice here???

There is a possibility that you will get compliance notice. You might have to go through all those pain and expenses for what? If value of Tata cliq voucher is say 7k, you are doing all this to save 5k? Remember that if you cannot satisfy the screening, you might spend more than 5k for professional help and transportation.

 

[Sherwin]

There is a possibility that you will get compliance notice. You might have to go through all those pain and expenses for what? If value of Tata cliq voucher is say 7k, you are doing all this to save 5k? Remember that if you cannot satisfy the screening, you might spend more than 5k for professional help and transportation.

What if I spend only 8 lakhs here?

 

[RupayMan]

What if I spend only 8 lakhs here?

Apply Basic rules, if not 15, then pay annual fee, get tata voucher, for 8L u already got a lot of ER points which compensate the GST fee.

 

[Sherwin]

Apply Basic rules, if not 15, then pay annual fee, get tata voucher, for 8L u already got a lot of ER points which compensate the GST fee.

By overspending more than my INCOME only the issue na.. If I spend 8L then no notices come from Income tax department..
Am right Bro?

 

[VijayflyRaven]

Yes by spending more than income, you become an easy target. By spending less than your income, you escape that rule. Nobody can be sure if axis will report for 8L (although people say it is 10L).

By overspending more than my INCOME only the issue na.. If I spend 8L then no notices come from Income tax department..
Am right Bro?

 

[RupayMan]

By overspending more than my INCOME only the issue na.. If I spend 8L then no notices come from Income tax department..
Am right Bro?

Ofcourse, also it's just not like u cannot spend more than 8L, if the income is 8, why because, a friend or a relative may ask u to order something on their behalf, they pay u via UPI for ex, then no issues, it will come under trail. Probelm arises when u spend more than 8L and u get the money from friend via cash. There is no trail to track. Hope u got it

 

[VijayflyRaven]

Ofcourse, also it's just not like u cannot spend more than 8L, if the income is 8, why because, a friend or a relative may ask u to order something on their behalf, they pay u via UPI for ex, then no issues, it will come under trail. Probelm arises when u spend more than 8L and u get the money from friend via cash. There is no trail to track. Hope u got it

Another point of view is to avoid being short listed for compliance notice. Let’s say I earn 8L and my wife earns 8L. I can spend 10 lakhs and the extra 2L could be by my wife and she can pay the bill too via NEFT directly to card.

It is super easy and clean here. But if IT software does not know the full picture (which is the case), they will send us a notice. We will definitely come out of it but why go through this pain?

 

[sxchzy]

Bottomline is you should be able to justify your spends.
Doesn't matter if your income is 8L and spends are 16L.
If it is legit then no problem

 

[Tosh]

If your spends and genuine and you can justify them then even if you spend 1Cr on the card it shouldn't be an issue. You can tell where the money came from in case if you are questioned. You should know that using your credit cards for your friends isn't allowed it's for personal use although all of us do it but heavy spending isn't recommended.

But honestly from that way you are enquiring it feels like you're trying to find the upper limit of spends possible with your income for 'not being spotted'

Magnus is a double edged sword highly rewarding but can punish equally if you are planning on rotation just stay away, if you cannot hit milestones without worrying stay away, if you are jumping on the magnus wagon for rewards because it's the talk of the town STAY AWAY.

 

[sxchzy]

If your spends and genuine and you can justify them then even if you spend 1Cr on the card it shouldn't be an issue. You can tell where the money came from in case if you are questioned. You should know that using your credit cards for your friends isn't allowed it's for personal use although all of us do it but heavy spending isn't recommended.

But honestly from that way you are enquiring it feels like you're trying to find the upper limit of spends possible with your income for 'not being spotted'

Magnus is a double edged sword highly rewarding but can punish equally if you are planning on rotation just stay away, if you cannot hit milestones without worrying stay away, if you are jumping on the magnus wagon for rewards because it's the talk of the town STAY AWAY.

Using it for buisness use and commercial use is restricted.
But if you want to pass on the benefits such as card discounts and others I don't think that is a violation of fair usage policy

 

[PiperatGatesofDawn]

You're confusing the tax man with the credit card man. The tax man does not care about credit card rotation, business spends on your credit card etc.

Also the tax man will not care about 10L spends when your income is 8L. They have more important things to do in life. And so should you. It would be incredibly unlikely for someone @ 8L salary to be pulled up for an audit. Other than that - you're free to live outside your income on loans and all kinds of debt in the world that you can get.

It's called "Income tax" for a reason. It's your sources of INCOME that they are looking to tax. Excessive credit card spends, home loans, car loans, personal loans, pay day loans etc. are not sources of income.

 

[gurbina]

You're confusing the tax man with the credit card man. The tax man does not care about credit card rotation, business spends on your credit card etc.

Also the tax man will not care about 10L spends when your income is 8L. They have more important things to do in life. And so should you. It would be incredibly unlikely for someone @ 8L salary to be pulled up for an audit. Other than that - you're free to live outside your income on loans and all kinds of debt in the world that you can get.

It's called "Income tax" for a reason. It's your sources of INCOME that they are looking to tax. Excessive credit card spends, home loans, car loans, personal loans, pay day loans etc. are not sources of income.

You're right, it is not a source of income but what they care about is about payments toward credit cards. I can spend 20L and not make a payment, nothing gets reported in AIS. I can spend 10L and pay the 10L and it will show up in AIS.

While it is not an indicator you'll get an audit or notice, it is being reported now and it's data IT is using to their advantage.
Is there bigger whales or businesses to go after? Yes. But that doesn't mean you will get away without a notice/audit.

Does anyone know the thresholds or metrics for a tax notice? No.
How do they find and pick who to send a notice or audit first? Also nobody seems to know.

But they have the data and it's easy to find when the income can't justify the payments made, so there's a good reason for them to send you a notice and audit that person. With the current status overall, I'd bet they're close or already have useful insights on the taxpayers already. Now with AADHAAR-PAN linking it's like a nail in the coffin for many people.

It wouldn't come as a surprise if as soon as you file your taxes you get a notice to justify the payments towards a credit card if they can't be justified by your income.

Most notices and audits seemed to happen 3-4 years after the financial year in question and some even 7 years back earlier on. Doing some Google-Fu will bring some forums and posts about people who have gotten a notice. Sadly in all of them there's no updates on the outcome or process, just advice on getting a CA.

So while it is unlikely to get a tax notice in many cases there's a chance that it might happen. And this risk has increased a LOT.

If you can justify your payments with loan money or rotating money there shouldn't be any repercussions or penalties but it will be troublesome to deal with. Those abusing it to mint points or get a lot of cashback might be considered as a profession or business, they might face penalties.

Each person will have to evaluate their case, it's impossible to measure the chances of getting an audit/notice as of now. But IT has the data and if you think you might come under their radar better be aware and prepared in case of an audit, they can be painful and time consuming. You'll be a suspect of tax avoidance and there will be questioning and scrutinity of all your financial transactions.

It might feel unfair while there's whales like businesses, politicians and others blatantly avoiding taxes or even committing tax fraud. But it is the current state of affairs, we all would love to get rid of corruption and to prioritize these people but it is beyond our control.

 

[NikhilTravelLover]

As far as I Know,

10 Lacs / year Credit card spends,
1 lakhs Cash payment of Credit card bill gets notified to income tax dept.

Thread 'Income tax notice for credit card spends..' https://www.technofino.in/community/threads/income-tax-notice-for-credit-card-spends.8701/

 

[bitsst]

I have salary of 9 lakh CTC.... If I try to apply Axis Magnus... Suppose it get approved...
My question is...
There is spending milestone of 15 lakh per year to avoid Annual fee...
Somewhat if I achieved that 15 lakhs or atleast 11 lakh...

What about the status of Income Tax AIS notice here???

In my opinion, it will be noticed by Income Tax department. Sooner or later notice might arrive.

1. If the credits in your bank accounts including salary are less than credit card expenditure, then there will be a definite notice for explanation.
2. If the credits in the bank accounts are more than credit card expenditure, (which will be disproportionate to your salary), you may or may not get notice.

I also have a Magnus and ITR of over 48 L, but even I do not aim for annual fees waiver. All I do is, club my quarterly expenditures like Insurance, School Fees, Maintenance, Milk, Electricity Bills, NPS etc., 4 to 5 times an year(to take monthly expenditure marginally beyond 1L) to get milestone benefits of 25k Points per occasion for these 4 to 5 Lacs spends.

My primary spending is through Infinia.

Hope that helps.

 

[mr_vasanth]

Ofcourse, also it's just not like u cannot spend more than 8L, if the income is 8, why because, a friend or a relative may ask u to order something on their behalf, they pay u via UPI for ex, then no issues, it will come under trail. Probelm arises when u spend more than 8L and u get the money from friend via cash. There is no trail to track. Hope u got it

As per banks terms credit cards are meant for only personal usage. not for helping friends and relatives

 

[sxchzy]

As per banks terms credit cards are meant for only personal usage. not for helping friends and relatives

tracing this becomes very hard forr the bank so it cant distinguish these transactions

 

[mr_vasanth]

tracing this becomes very hard forr the bank so it cant distinguish these transactions

True. They won't track this under normal circumstance. But if it reaches a stage where the transactions need scrutiny it will be questioned. For example, if the invoice of the product is not in your name or immediate dependents name then it's not your personal purchase. That's how the banks will probably see it.

 

[RupayMan]

As per banks terms credit cards are meant for only personal usage. not for helping friends and relatives

I don't know if someone is denying for friends or relatives request for purchase something and get the money back in account and enjoy rewards. Being in this group no one will say no.