Credit Card Users Alert! Tax Department Is Monitoring Every Major Transaction – Times Bull
Credit Card Update: If you use a credit card, this news may be important for you. The Income Tax Department has introduced new draft income tax rules, effective April 1, 2026. These rules specifically address changes related to credit cards. They aim to increase transparency in digital transactions and prevent tax evasion. If implemented, these rules could replace the old 1962 rules. Consequently, credit card users may have to change their spending and tax payment methods.
Monitoring Large Expenses
According to the draft rules, if an individual makes a digital payment of ₹10 lakh or more in a financial year, the bank or card company can report it to the Income Tax Department. Similarly, cash transactions of ₹1 lakh or more can also be reported. This is intended to monitor large expenses and ensure compliance with tax rules. This means that large credit card expenses will now be directly monitored by the tax department.
New Uses of Credit Cards
According to the new rules, a credit card statement can now be considered as proof of address if it contains a correct and updated address. This is beneficial for those who do not have documents such as electricity or water bills. Furthermore, the draft rules also allow income tax payments using credit cards. However, this facility may incur bank processing fees or interest.
Employee Expenses and PAN Requirement
If a company provides credit cards to its employees, personal expenses will be considered an additional benefit and taxable. However, office-related expenses such as business trips, meetings, or client entertainment will not be taxable. The company will be required to maintain records of all expenses. Furthermore, the new rules require a PAN to obtain a credit card from any bank or financial institution. Applications without a PAN will not be accepted, making it easier to track large transactions.
Comments are closed.