Credit Card to Wife's Saving Bank Transfer

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This discussion explores the tax implications of transferring funds from a credit card to a spouse's savings account, particularly for freelancers who file under 44ADA. The core question is whether these transfers are considered taxable income, a gift, or a loan. The advice suggests treating it as a loan if repayment is expected, or as tax-free pin money from a husband if not, though this requires documenting drawings. The actual benefit needs to be weighed against transfer charges and the value of credit card rewards.

Rohit Gupta

Rohit Gupta (Querist)
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28 December 2022 Hello,

If I transfer 1lac per month from my credit card to my wife's saving account, is this taxable income for her? Or a Gift from me?

If she sends the amount back to me in my savings account or directly pay it back in my credit card using Billpayment portals, does this balances it out and we don't need to show it anywhere?

Basically, I want to achieve monthly milestone of my credit card to gain some rewards and apps like BharatNXT, Paytm or Cred allow me to transfer amount to her savings bank account.

Please advice if this practice sound ethical and justifiable just to earn CC rewards.

CA Kamlesh Kukreja

CA Kamlesh Kukreja (Expert)
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29 December 2022 You have to show Transfers as Loan in Both Books if She Repays you the same or going to repay. if amount is not going to be repaid she can show as pin money from Husband which is not taxable but then you have to show such amount as Drawings in your books. however you need to compare charges payable on transfer from CC to Saving account with Value to be received from CC Points Redemption to get idea of actual benefit

Rohit Gupta

Rohit Gupta (Querist)
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29 December 2022 Thanks a lot for your reply Sir.

We both file our ITR as Freelancers under 44ADA hence we don't keep any PnL or Books. Will this be a problem?

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