Is cashback taxable? For example SBI cashback card gave some person 60k cashback in a year .. do we need to pay income tax on that ?

Yes

Hotsoup wrote:

Yes

so better to use card which gives points instead of hard cash ?

Even if you receive 100 rs cashback and your income comes under taxable slab you pay tax on this

@third.i.financial.advisors

raja wrote:

Even if you receive 100 rs cashback and your income comes under taxable slab you pay tax on this

I think it has the shared limit with gifts recieved of rs 50k. If both cashback and gifts exceed 50k, then only you need to declare that as income from other sources. Anyone can correct me if I'm wrong

legend101 wrote:

I think it has the shared limit with gifts recieved of rs 50k. If both cashback and gifts exceed 50k, then only you need to declare that as income from other sources. Anyone can correct me if I'm wrong

In CB first, check this CD with the type of cashback and what is used for items those purchased and CB received
around 6 to 7 conditions there so its depends on CB type and their nature

Don't worry its very hard to track the cashbacks.

IT department don't have enough resources to track the ITR yet, and we are talking about cashbacks here.

• If your spends is genuine & you are filling ITR more than your spends then no need to worry.
• Even if your spends is not genuine and you are still filling ITR then its fine as well, due to lack of resources
  
• But if you're not filling ITR more than the card spends and your card spends is reflected in AIS, then its a red alert for you.

Technically total CB/gifts from all sources in excess of 50K is taxable. Even redemption of points for cash/cash equivalents come under this. Direct discount is better that way and is totally not taxable.

However, as of now, this is outside the IT radar and is not part of the AIS Reporting system. But how long it would remain so is anyone's guess.

So make hay while the sun shines. 

flash007 wrote:

Don't worry its very hard to track the cashbacks.

IT department don't have enough resources to track the ITR yet, and we are talking about cashbacks here.

• If your spends is genuine & you are filling ITR more than your spends then no need to worry.
• Even if your spends is not genuine and you are still filling ITR then its fine as well, due to lack of resources
  
• But if you're not filling ITR more than the card spends and your card spends is reflected in AIS, then its a red alert for you.

Tum To Bahut Gyaani Go Yaar.... Really appreciated👍🏻

Spanjaykumar wrote:

Tum To Bahut Gyaani Go Yaar.... Really appreciated👍🏻

sarcasm? 😂

flash007 wrote:
sarcasm? 😂

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Spanjaykumar wrote:

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maine trading post dalna hi kum kr diya ab, unki wajh se. 

Vaise jaida purani baat nhi h, 6 mahine hi hue hai mjhe DD join kiye hue...

mojo_jojo123 wrote:
so better to use card which gives points instead of hard cash ?

They'd convert those reward points into value of cash and tax accordingly 

Ramta_Jogi wrote:

They'd convert those reward points into value of cash and tax accordingly 

so ppl who got lakhs of magnus points they have to pay a lot ?

 As per rules , the tax has to be paid on any income. In the real world, its peanuts , and cant be tracked by dept. 

mojo_jojo123 wrote:
so ppl who got lakhs of magnus points they have to pay a lot ?

My reply was on a "hypothetically speaking" terms.

IT department is not actively after such as these can easily be covered as "Discount post purchase". 

mojo_jojo123 wrote:
so better to use card which gives points instead of hard cash ?

Doesn'tatter points or cash if you are above 50k you need to pay taxes. Points can be black money if you go to GV and not redeem them.

Tax on cashback must be the dumbest rule ever! We spend a lot and get a little bit back so we have to pay tax on it. No capital was invested, no services were provided, so it is not really an income. 

Cashback are similar to discounts. Imagine paying tax on discounts. A jeans MRP is 4000 but it is available at 75% off so you are saving 3000 now pay 30% tax to govt from those savings of 3000.

geetansh1991348 wrote:

Tax on cashback must be the dumbest rule ever! We spend a lot and get a little bit back so we have to pay tax on it. No capital was invested, no services were provided, so it is not really an income. 

Cashback are similar to discounts. Imagine paying tax on discounts. A jeans MRP is 4000 but it is available at 75% off so you are saving 3000 now pay 30% tax to govt from those savings of 3000.

No capital was invested, no services were provided, so it is not really an income.  --- Taxes dont work like that.... If i give you 1 lakh for free .... without you investing capital or providing services ..... you have to pay 30k+ tax on it.  .... I agree to your point though but IT act provides concession upto 50k . So it covers all small cashbacks that you get.

Cashbacks arent similar to discounts when it comes to income tax !

 

third.i.financial.advisors wrote:

No capital was invested, no services were provided, so it is not really an income.  --- Taxes dont work like that.... If i give you 1 lakh for free .... without you investing capital or providing services ..... you have to pay 30k+ tax on it.  .... I agree to your point though but IT act provides concession upto 50k . So it covers all small cashbacks that you get.

Cashbacks arent similar to discounts !

 

The 1 lac gift to me is your money. If gifts were free everyone would be getting gifts instead of salary. 

Cashback is a part of my own money and I am getting it back. 

flash007 wrote:

Don't worry its very hard to track the cashbacks.

IT department don't have enough resources to track the ITR yet, and we are talking about cashbacks here.

• If your spends is genuine & you are filling ITR more than your spends then no need to worry.
• Even if your spends is not genuine and you are still filling ITR then its fine as well, due to lack of resources
  
• But if you're not filling ITR more than the card spends and your card spends is reflected in AIS, then its a red alert for you.

When will card spent reflect in AIS, is their any capping?

KrishabhAgrawal wrote:

When will card spent reflect in AIS, is their any capping?

• 10L spends per bank credit card
• or 1L Credit card payment by cash 

geetansh1991348 wrote:

The 1 lac gift to me is your money. If gifts were free everyone would be getting gifts instead of salary. 

Cashback is a part of my own money and I am getting it back. 

Cashback is not part of your money. It is the company's money now once you purchase anything from that company & which it "choose" to give it to you. Just because you get cb within few seconds or few days/weeks doesn't matter as technically it remains that company's money given to you.

guest_999 wrote:
Cashback is not part of your money. It is the company's money now once you purchase anything from that company & which it "choose" to give it to you. Just because you get cb within few seconds or few days/weeks doesn't matter as technically it remains that company's money given to you.

Haan bhai company free mein baat rhi hai sabko as a gift. Term ka naam hi cash-back hai. 

geetansh1991348 wrote:

Haan bhai company free mein baat rhi hai sabko as a gift. Term ka naam hi cash-back hai. 

It is for legal purposes as any business can't just give "gift" to anybody just like that.

raja wrote:

Even if you receive 100 rs cashback and your income comes under taxable slab you pay tax on this

If you are not doing any business nor claiming expenses for the transaction for which you recd cashback then it can be treated as a discount in case of purchase cashback or instant discount. Aggregate of 50000 rs. or more in one FY in card cashback or points redeemed for value and gifts recd from other than lineal relatives  then you are required to  report under income from other sources and pay tax

upto 50k cashback is tax exempted, above that you need to declare as income i guess i have read somewhere ;_; 

itsmanohar99862 wrote:

upto 50k cashback is tax exempted, above that you need to declare as income i guess i have read somewhere ;_; 

excluding credit card points ?

itsmanohar99862 wrote:

upto 50k cashback is tax exempted, above that you need to declare as income i guess i have read somewhere ;_; 

It is not cb but gifts received from "strangers" which is exempt till 50k. If your family members like your brother/sister/parents give you any amt of money/gift it is 100% tax free assuming they already showed that money in their itr & paid taxes on it.

@mojo_jojo123 credit card points are not taxable as long as they are not redeemed against something but usually income tax dept doesn't care about this unless points are huge in value in which case your credit card itself has more chances of being cancelled before income tax dept notice.