Income TAX related to personal credit card payment for business

Hi, my name is Avishake. I have one question. I am working for an IT company that doesn't have any cards. So, the company told me to pay with my card, and they will pay me. So, I was agreed. It is spent on my cards, and the company directly pay to that credit card. But later on, I learned that if I spent more than ten lacks from my credit card, the Bank would notify the Income Tax department. So, I told my company that this is not possible anymore as it will affect my ITR.
After a couple of months, the company arranged cards from the Bank. When they stopped spending, it was already more than ten lacks. As I filled the ITR for FY 22-23, I mentioned all my cashback and reward points from the credit card as other sources of income.
The company gave me all the invoices for what they spent and the company bank statement, showing that they paid directly to the credit card.
Before doing this, I asked my bank relationship manager if I could do this or not. They say you can, as it happened directly through a credit card and company bank account. It will not affect your ITR. But they misguided me, which I understand a few months later.
I accept it is my mistake that I do that. Whatever my income from those transactions is, I disclose it as cashback or reward points in the ITR.

I want to know what issue I may face and the solution. Also, please tell me how many years I need to keep those data.

Regards,
Avishake

Hi Avishake,

Thanks for sharing the detailed scenario—this is a common concern when personal cards are used for business expenses.

Key points regarding your situation:

Payment of business expenses via personal credit card
Since you paid business expenses on your personal card and the company reimbursed you directly by paying the card bill, this is essentially a reimbursement transaction, not income. The actual expense is for business, and the reimbursement cancels it out.
TDS or Income Tax Department notification on high credit card spends
The bank notifies the IT Department when credit card spends cross ₹10 lakhs in a financial year. This is just information; it does not automatically imply taxable income unless the amount is unexplained or considered income by the tax department.
Disclosing cashback/reward points as income
Cashback and reward points are usually considered tax-free as per CBDT clarifications and several rulings, since they are treated as a discount or rebate on expenses, not income. However, you disclosed it, which is a safe approach.
Possible issues
- The tax department might ask for documentary proof that the large payments were reimbursed business expenses, not personal income.
- You have invoices and company bank statements showing direct payments to your card, which is good proof.
How to avoid trouble
- Keep all invoices, payment proofs, company reimbursement letters, and correspondence safely.
- Maintain proper documentation that these payments were business expenses reimbursed to you.
- In case of any notice or inquiry, you can submit these proofs to clarify the nature of transactions.
Retention of records
As per Income Tax Act, retain all documents for at least 6 years from the end of the relevant assessment year. Since this relates to FY 22-23, keep these documents until AY 28-29.

Suggested action if you receive any query from IT Department:

Respond promptly with evidence of reimbursements and invoices.
Show that the amounts are not personal income but business expenses.
If needed, consult a CA for drafting replies or for representation.

Summary:
You are not liable to pay tax on the reimbursed business expenses paid via your card. Cashback/rewards are generally exempt. Just maintain and produce proper documents if required.