• Income tax for credit card purchases

Sir , I am using credit card of limit 8 lakhs but I don’t have income , spends through my parents money as I am still studying, can I pay my family shopping through my credit card ( my sister n brothers ) and they transfer to my account later ,will there be any IT problems?
Asked 12 months ago in Income Tax from Dharwad, Karnataka

Hi

No, there would not be any problem as such. Provided you maintain details of all such credits to your account and have explanations to prove the genuineness in case and query arises.

On a safer side, you should file NIL income tax returns for these periods.

Lakshita Bhandari
CA, Mumbai
2254 Answers
81 Consultations

5.0 on 5.0

Spending credit card in excess of Rs 2 lakhs will attract income tax eyes. It's not advisable to do so.

Vidya Jain
CA, Kolkata
639 Answers
15 Consultations

4.8 on 5.0

Bills of your credit card is treated as exp of your father/mother who pay the bills. there is no IT problem if they shown the same in proper way.they can either show this amount as exp or loan to you.

Lalit Bansal
CA, Delhi
566 Answers
37 Consultations

5.0 on 5.0

Hi,

Please let me know in whose name is the credit card?

Because if yearly payments in a credit card exceeds 2 lacs then credit card company will give the info to tax department and if tax department finds that person is not filing return of income or return filed by the person is not commensurate with the annual expenses, they will send notice.

Please feel free to call/ revert in case you need more clarity.

Thanks and regards

Abhishek Dugar

CA CS B.Com

Abhishek Dugar
CA, Mumbai
3576 Answers
162 Consultations

5.0 on 5.0

Hello,

No problem in doing so. No IT problems as such.

In case your credit card bills exceed Rs. 2Lacs per year, make it a point to file your IT returns.

Trust this clarifies your query.

Feel free to call / get back in case of further clarifications.

Thanking You.

Regards,

Rohit R Sharma

BCOM, FCA, LLB, CERT. FAFP

Rohit R Sharma
CA, Mumbai
2104 Answers
91 Consultations

5.0 on 5.0

No there will not be any tax compliance as you use the money transfer by your parents also brother and sister comes into category of RELATIVE

so nothing to worry

Shiv Kumar Agarwal
CA, Delhi
290 Answers
61 Consultations

5.0 on 5.0

Hi,

Yes, you can pay for their purchases and they can transfer the amount to you.

Regards,

Keerthiga Padmanabhan

M.Com., CA, LL.B

Keerthiga Padmanabhan
CA, Greater Mumbai
784 Answers
23 Consultations

5.0 on 5.0

If your credit card is a dependent card, the responsibility for the payment of the credit card dues lies with your primary card holder only and such person should have adequate resources to make the payment. You need not worry about the sources of payment then. However, if your card is in your name as a primary card holder, the settlement of dues is your responsibility and you should be able to explain the sources for such payments. If the money for the payment of such dues is received from your parents or your own brothers and sisters, then they are in the nature of gifts to you and are exempt. You need not pay any tax on such receipts from them.

B Vijaya Kumar
CA, Hyderabad
865 Answers
61 Consultations

5.0 on 5.0

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