Sft transactions credit card; income tax

Tax queries 527 views 3 replies

Guest

I have one credit card. And last year i.e., Jan 2022- Jan 2023 i have used it for approximately 4.5lac (credit card payments). My reported income is 9.5lac. Majority of payments were done via online transactions from my mother's account. None of the payments were made via cash except one of around 50k. I do file my tax and so does my mother. Can this be a problem? Because i use a different account to pay for online transactions and it only has transactions from my mother's account. I have never mentioned that account in my filings ever. However my mother's account is shown for filling purposes so every transaction made to my account is shown there. Can I receive an inquiry on this issue i.e., 4.5 lac that I've paid in credit card bills this year? First credit card user so not much information on this.

Replies (3)

Manoj BG

Tax Professional and in Service

1795 Points Joined June 2009

I understand that credit card bill of Rs. 4.5 lakhs paid via your mother's bank account. If this understanding is correct, then it would not create any issue as that would amount to gift from relative and same is exempt from income tax. No one can guarantee if you get notice on such transaction, but this type of arrangement is common and do not think much issue associated with that.

Regards,

Manoj

Guest

a. No the bills were paid using the funds in MY account via that were transferred from my mother's account. So funds from my mother's account, that is mentioned in my filings to my account that is not mentioned in my filings because there is no money deposited into that account apart from the ones that is transferred from my mother's account. This qualifies as gift?

b. Also i read about the limits. Since no cash payment beyond 1lac has been done or transactions of more than 10lac in one year, is a notice still possible?

c. And if i do have to file this how should I go about?

Sri Vishnu

7 Points Joined January 2023

I'm using credit card vigorously just for cashback points. But my monthly billed statement is <5000. I'm repaying the dues before the statement is been generated. Till now, i made 20L + usage in credit card but the overall billed statement is < 1 lakh. Will I be traced in form 26 AS under SFT-006? Will IT department found me?

Read more at: https://www.caclubindia.com/forum/credit-card-billed-statement-lt-10lakhs-596471.asp