Income Tax Notice: Due to Credit Card Usage:

Income Tax Notice: Due to Credit Card Usage You might receive an Income Tax notice for excessive use of Credit Card. When you get notice on credit cards

1. Exceeding Rs. 1 lakh in cash payments for credit card bills in the financial year.
2. Exceeding Rs. 10 lakh in a financial year in payments made on credit card debt using any method other than cash.

What to Do When You Get Notices Income tax is imposed on income, not on your expenses, but you have to clarify the source of your expenses. Case 1: If you have not filed your ITR, you will receive an e-campaign notice for credit cards. In this case, consult with tax experts and submit an ITR or submit feedback. Case 2: If you filed the ITR but it did not match your expenses, Example: Income is Rs. 2 lakh, but card bill repayment is Rs. 50 lakh. In this case, revise the ITR and submit the feedback, or we need justification or proper receipt of income for future notices. Never do anything with your credit cards.

1. Never do money rotation through cards. Even if bills are less than 10 lakh, The IT Department is tracking everything.
2. Don't use your cards for anything else but earning rewards, etc.
3. If you are a heavy spender, then just make a pre-payment of cards, which generates less of the bill. (30% of the credit limit) because exceeding that level will have a significantly negative impact on credit scores,