https://www.desidime.com/discussions/got-income-tax-notice-for-credit-card-spends?page=1#post_9578571
How do you get a notice? An email of physical letters?
Got income tax notice for credit card spends
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Income Tax Notice for Credit Card Payment
I have placed various orders from Flipkart with Flipkart Axis Bank credit card and after buying those orders sold them outside at lower prices.I gave the outside shopkeeper a lower price than the prize I bought.But since I got five percent cashback, I got some profit and not loss.
Besides credit card payment showed deposit for which I have already replied with bank statement.And all the deposits were made by myself and no money was sent to anyone.
Can I now tell the income tax department that I used to run a cyber cafe and have customers there and for them I bought these things with my credit card.
Income tax department has asked me for credit card statement and which I will send them.
But income tax asked me about the payment I sent and their details and PAN number but I don't have any details.
And yes I have been filing regular income tax for 3-4 years and I show that my income is less than 5 lacs in the year.
And as a business I saw that I have a shop for electronics.
And since I didn't file income tax on time I also paid 1000 late payment fee.
I got this notice from it dept-
Please refer to the notice under section 133(6) issued from this office and the subsequent reply made by you. Please note that as per
the Trading & Profit and Loss Account furnished by you, the total sales is Rs.18,xx,xxx/- whereas as per information, your total
payment by credit card amounts to Rs.25,xx,xxx/-. So you are requested explain the issue and submit the details of the person
(including PAN and Contact number) for whom the payment has been made. You are also requested to submit the credit card
statement for the F.Y. 2020-21. You are requested to comply within xx/xx/2023.
Response to the letter can be furnished through Compliance Portal only.
I have done a lot of shopping with credit cards for the rest of the years but since I paid the income tax on time I didn't get the notice.
Income tax notice was sent to me because I did not fill the income tax in that year but after sending the income tax notice I paid the income tax with late payment free.
To the first notice I have given the reply in due time and this is the second notice that I have been questioned again.
Now how do I give the reply to the IT department yes I will send the cc statement but how do I tell them can someone explain me so that I can give the reply properly.
Edited-
This is the original notice which I received two to three months ago.At that time I had not filled ITR for that year and I was asked to fill revised ITR and I filled ITR with late payment fee ( 1000 INR ).
And I gave answers to the questions that were put to me and I also sent my trading PL statement statement and bank statement.
But today I got another reply to that notice.
Remaining year ITR-4 is already filed and business name is ABC Trading & Online
Nature of bussiness shown in ITR- Electronic Goods and Accessories
Income Tax Notice for Credit Card Payment
I have placed various orders from Flipkart with Flipkart Axis Bank credit card and after buying those orders sold them outside at lower prices.I gave the outside shopkeeper a lower price than the prize I bought.But since I got five percent cashback, I got some profit and not loss.“But since my card got canceled in the last month, I didn’t get the cashback that I earned in last month, so I didn’t have any money in my pocket.”
“The cash pack of the last month was so much more than the first two months”.So since I didn’t get the last match cashback, ultimately the cashback I earned for the first two months is no longer in my pocket.
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Top Comments
https://www.desidime.com/discussions/got-income-tax-notice-for-credit-card-spends?page=1#post_9578613
DeleteThisAccountAdminOrBanMe wrote:How do you get a notice? An email of physical letters?
On my email id
https://www.desidime.com/discussions/got-income-tax-notice-for-credit-card-spends?page=1#post_9578668
@third.i.financial.advisors @abhishek012
@mandalorianmode511
: in general they send both
https://www.desidime.com/discussions/got-income-tax-notice-for-credit-card-spends?page=1#post_9578680
How much were your total spends on cards and the ITR income you show?
https://www.desidime.com/discussions/got-income-tax-notice-for-credit-card-spends?page=1#post_9578694
How much were your total spends on cards and the ITR income you show?
https://www.desidime.com/discussions/got-income-tax-notice-for-credit-card-spends?page=1#post_9578699
Ramta_Jogi wrote:How much were your total spends on cards and the ITR income you show?
As per the details - OP's spend - 25Lac+ , ITR < 5 Lac
https://www.desidime.com/discussions/got-income-tax-notice-for-credit-card-spends?page=1#post_9578703
@palkunal376917 , Go to some good CA, revise your ITR and respond accordingly.
https://www.desidime.com/discussions/got-income-tax-notice-for-credit-card-spends?page=1#post_9578711
May be I'm not paying keen attention. I didn't understand whether you really have electronics store or you just want to say you have the store for the IT department.
As a side hustle I work in insurance, income tax, mutual funds etc. I closely work with a CA in my team and handle notices. When 133 (6) notice is served, returns are revised. I read that you have already done that. Based on my experience handling the notices, the AO keep sending notices despite corrective action. In your case, the notice is for your store not for you, right? So I don't think you filing returns is going to help. If you have a store, can't you just respond saying it was a trade activity? You need to talk to CA. I'm just giving my opinion.
https://www.desidime.com/discussions/got-income-tax-notice-for-credit-card-spends?page=1#post_9578714
DeleteThisAccountAdminOrBanMe wrote:How do you get a notice? An email of physical letters?
SMS and email. Sometimes the AO in a rush use someone else's email address then you obviously receive only SMS.
https://www.desidime.com/discussions/got-income-tax-notice-for-credit-card-spends?page=1#post_9578745
Ramta_Jogi wrote:How much were your total spends on cards and the ITR income you show?
This is the original notice which I received two to three months ago.miscellaneous payment i= total spends on card.
ITR income I have shown 3 lacs.
https://www.desidime.com/discussions/got-income-tax-notice-for-credit-card-spends?page=1#post_9578771
How much did u spend on your FK Axis cc during that financial year?
https://www.desidime.com/discussions/got-income-tax-notice-for-credit-card-spends?page=1#post_9578804
CONTACT WITH CA DEFINITELY HELP YOU
https://www.desidime.com/discussions/got-income-tax-notice-for-credit-card-spends?page=1#post_9578824
Your spends is 25 lakhs but showing 5 lacks income will defiantly be doubtful in eye if income tax officers. Consult CA bro to get rid out of this problem.
https://www.desidime.com/discussions/got-income-tax-notice-for-credit-card-spends?page=1#post_9578836
https://www.desidime.com/discussions/got-income-tax-notice-for-credit-card-spends?page=1#post_9578886
Know a days its a very common issue for credit card holders but i try to to many way to knowing how to tackle this seeing many videos on youtube but not get satisfying answer. So I filled ITR 3 till Iam not get notice. i have alaso a expenses of 30lakh plus. Many people generate income from credit for commission basis.
https://www.desidime.com/discussions/got-income-tax-notice-for-credit-card-spends?page=1#post_9578925
THE_TRADING_MAN wrote:Know a days its a very common issue for credit card holders but i try to to many way to knowing how to tackle this seeing many videos on youtube but not get satisfying answer. So I filled ITR 3 till Iam not get notice. i have alaso a expenses of 30lakh plus. Many people generate income from credit for commission basis.
Itr 3 means?
https://www.desidime.com/discussions/got-income-tax-notice-for-credit-card-spends?page=1#post_9578929
These details are shown in AIS??
if yes then under which option this is showing
I checked you have received notice under section 133(6) for spends made on Flipkart which you later sold in local market at less price and made 5% bucks you have cafe and electronic shop
Please confirm you received this notice for only Flipkart spends of 25L or these are your total expenditure in FY20-21???
https://www.desidime.com/discussions/got-income-tax-notice-for-credit-card-spends?page=1#post_9578944
25 lakh spend is on single credit card or multiple credit cards?
https://www.desidime.com/discussions/got-income-tax-notice-for-credit-card-spends?page=1#post_9579044
DimeEarner wrote:These details are shown in AIS??
if yes then under which option this is showing
I checked you have received notice under section 133(6) for spends made on Flipkart which you later sold in local market at less price and made 5% bucks you have cafe and electronic shop
Please confirm you received this notice for only Flipkart spends of 25L or these are your total expenditure in FY20-21???
I have edited the post and added more information, request everyone to take another look at the post and help me and tell me what to reply.
https://www.desidime.com/discussions/got-income-tax-notice-for-credit-card-spends?page=1#post_9579078
If I show a service turnover of greater than 20Lakh, then I will have to get GST registeration too.
So please help me and tell me that I will reply? I'll send the cc statement showing that it's done only from flip kart & some small recharges from phone pe.
https://www.desidime.com/discussions/got-income-tax-notice-for-credit-card-spends?page=1#post_9579126
hritikviko wrote:25 lakh spend is on single credit card or multiple credit cards?
https://www.desidime.com/discussions/got-income-tax-notice-for-credit-card-spends?page=1#post_9579129
Expand
You'd be better of asking for advice from a regular CA, in person.
palkunal376917 wrote:Damn! Cash deposits of 16+L? And here, my CA firm gets upset with even 15K cash deposit!
This is the original notice which I received two to three months ago.miscellaneous payment i= total spends on card.
ITR income I have shown 3 lacs.
You'd be better of asking for advice from a regular CA, in person.
https://www.desidime.com/discussions/got-income-tax-notice-for-credit-card-spends?page=1#post_9579138
Expand
THUNDERBOLT wrote:
I paid this total amount on same credit card for just 3 months.
First two month cashback I get in my card but third month cashback I don't get in my card and I lost a lot of money.
So you can say that I have not profited any of my money, I have lost it all from the credit card. As already in the third month I did not get any cashback.
You tell me what should I reply now.
And my credit card is closed and no cashback is credited.
Then I didn't understand the thing so I did and the card got canceled and I didn't get any cashback of 3rd month.
https://www.desidime.com/discussions/got-income-tax-notice-for-credit-card-spends?page=1#post_9579172
Expand
Ramta_Jogi wrote:
Damn! Cash deposits of 16+L? And here, my CA firm gets upset with even 15K cash deposit!
You'd be better of asking for advice from a regular CA, in person.
For cash deposit I have sent bank statement and said that I have deposited it myself.
And then I fill ITR.And the notice that I have been asked today is only for the payment of credit card
https://www.desidime.com/discussions/got-income-tax-notice-for-credit-card-spends?page=1#post_9579192
Actually I can't find any good CA I have talked to many CA's they are not right about this they have no answer how will they reply to them.
That's why I posted this here so that you guys can help me and tell me what to reply
https://www.desidime.com/discussions/got-income-tax-notice-for-credit-card-spends?page=1#post_9579255
Spending on a card does not have a direct link with the income shown in itr which can be explained though to some extent but cash deposits is a big concern here. You can say something like you have taken loan from your multiple friends and relatives but their PAN needs to be shared along with the amount borrowed and AO may not necessarily check with those individuals if they are showing good income in their ITR. Other thing is marriage, if you got married by any chance during the year of deposits then you can say some of the amount was received as gift on the marriage from relatives. There are some other ways too but all need some kind of documentary proof plus support from you family, relatives and friends who can share their PAN.
https://www.desidime.com/discussions/got-income-tax-notice-for-credit-card-spends?page=1#post_9579262
https://www.desidime.com/discussions/got-income-tax-notice-for-credit-card-spends?page=1#post_9579299
Contact any tax consultant. Tell all the things to him. Tell the things which are correct. There is no point in lying in the notice. They can or may have asked your credit card statements. Don't lie to them in the notices. Depending on facts the reply can be formed by CA.
https://www.desidime.com/discussions/got-income-tax-notice-for-credit-card-spends?page=1#post_9579376
Don't do anything on your own, if you don't want to be in trouble.
Get help from CA and reply in a very sophisticated way, otherwise, you will be in a bigger problem.
Also, do anything within the limits to avoid any issues. Some of the common limits for 1 financial year is as follows:
- Cash deposit in savings account < 10L
- CC payment by cash < 1L
- CC spends per card (or combined in case of multiple cards from the same bank) < 10L
- if CC spends > 10L then ITR > All CC spends combined
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May be I'm not paying keen attention. I didn't understand whether you really have electronics store or you just want to say you have the store for the IT department.
As a side hustle I work in insurance, income tax, mutual funds etc. I closely work with a CA in my team and handle notices. When 133 (6) notice is served, returns are revised. I read that you have already done that. Based on my experience handling the notices, the AO keep sending notices despite corrective action. In your case, the notice is for your store not for you, right? So I don't think you filing returns is going to help. If you have a store, can't you just respond saying it was a trade activity? You need to talk to CA. I'm just giving my opinion.
Don't do anything on your own, if you don't want to be in trouble.
Get help from CA and reply in a very sophisticated way, otherwise, you will be in a bigger problem.
Also, do anything within the limits to avoid any issues. Some of the common limits for 1 financial year is as follows:
I heard somewhere that every problem have a solution itself one has to only find the way. don't waste your time and efforts here because now many PPL will come here and make fun of your situation, baaki me itna hi conclude kr paaya hu. isme tumhe Ek Experienced CA ki help cahiye family members friends relatives inki bhi jaroorat padegi although they are so called IT wale not ED baas IT ka chakkar ko jld se jld short out krlo nhi mentally haras hoge.