Credit card swipe commision recvd

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This discussion explores the legality and tax implications of earning commission by facilitating credit card swipes for cash. It clarifies that such activities are generally taxable. Furthermore, it advises that individuals or businesses engaging in this practice, especially those using POS systems without genuine sales, should register with relevant authorities, potentially through partnerships with franchises like banks or mobile service providers.

Shan

Shan (Querist)
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26 October 2024 Some people in markets swipe credit cards and give cash to the card holder for a commision.

My first question is, Is this legal to do so?

Second question is, what is the income tax treatment on such commision received by the person doing this kind of business?

Third question, Some sellers doing these transactions via their POS system, not selling anything but giving away cash against these swipes although they are genuine merchants, what is the legal view on this?

Please reply,

Thanks

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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26 October 2024 1. No.
2. Taxable.
3. Should register under relevant authorities to carry on such commission business.

Shan

Shan (Querist)
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28 October 2024 What are the relevant authorities to register and carry on such business?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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28 October 2024 Firstly get any franchisee like airtel or small banks for their authorized outlet. Rest they will ask to complete the required KYC documents.

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