Cashback are TAXABLE if cumulative CASHBACK EXC...

Cashback are TAXABLE if cumulative CASHBACK EXCEED 50000 in any financial year

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https://m.economictimes.com/wealth/tax/the-cash...
Do you know that these cash backs may invite taxes in certain situations? Income and taxes are the flipsides of the same coin. Any monetary benefit received by a person by way of gifts or cash backs from a non-relative might be subject to income-tax under the head ‘Income from Other Sources’ or ‘Profits and Gains from Business or Profession’, as the case may be.
Before we evaluate the taxability of such benefit schemes, it would be imperative to first take cognizance of the provision of Section 56(2)(x) of the Income-tax Act. This provision provides for levy of tax if any sum of money is received without consideration. This tax, popularly known as ‘gift tax’, is levied only if the aggregate value of such sum exceeds Rs 50,000 during the financial year. If the benefits are not given in the form of cashbacks but in form of accessories (i.e., free earphones, power banks, etc.), this provision shall not be applicable. However, market value of freebies can be taxable if goods are purchased for the purpose of business or profession as all benefits, arising in the course of business or profession, are taxable under section 28(iv) whether they are convertible into money or not.
In other words, the provision of gift tax can be invoked only if any monetary benefit is received by way of credit in the bank account, e-wallets or credit card. In case of gifts received in kind, no amount is credited to the user’s account, hence the provision of gift tax shall not be applicable.
In the discussion below, we have evaluated various discount schemes to determine their taxability.
Instant discounts
In instant discount schemes, if the customer opts to pay for the order using the prescribed debit card or credit card, an extra discount is offered by the website which is instantly subtracted from the listed price and customer pays the net discounted amount only. If the customer is buying the goods for his business or profession, the net price shall be allowable as business expense or if it is a capital asset (i.e., laptop, ACs, TVs, etc.) then the depreciation will be allowed on the net amount only.
However, if goods are purchased for personal consumption and not for any business or profession, then nothing shall be chargeable to tax as no monetary benefits are received by way of credit to the account of the customer.
Deferred cash backs
In ‘Cashback’ schemes, if customer chooses to pay with the credit card or debit card of partner bank, the bank credits the predetermined cashback in card user’s account at the end of a pre-determined ‘cooling’ period. If an individual receives cashback in relation to purchase of any goods, not being a capital asset, for the purpose of business or profession carried on by him, then the buyer can either claim the deduction only for the net expenditure after reducing the amount of cashback from total expenditure or to add the cash back to ‘other business receipts’ and declare in income tax return as part of gross income.
If cash back is received in respect of purchase of a capital asset to be used for the purpose of business or profession carried on by him, then he can claim depreciation on the net amount after reducing the total value by the amount of cashback or he can claim depreciation on gross amount and pay tax on the cashbacks as other business receipts.
If cashback is received for the goods purchased for personal consumption, then the same shall be taxable under the head “Income from other sources” only if the total amount of cash back exceeds Rs 50,000 during a financial year. Further, where the amount of cash back is less than Rs 50,000 but in addition to this cash back the buyer has also received some monetary gifts from non-relatives or friends and the aggregate of such gift and the cashback exceeds Rs 50,000, then he shall be liable to pay taxes on such aggregate value.
For example, Mr. A bought a camera for Rs 50,000, on which he received a cashback of Rs 10,000. Additionally, he received a gift of Rs 45,000 from one of his friends. Even though the amount of cash back is less than Rs 50,000, yet, the aggregate of cashback and gift exceeds Rs 50,000. The entire receipt of Rs 55,000 shall be taxable in the hands of the Mr. A under the head “Income from other sources”.
Frequent flyer miles
Frequent flyer miles are the rewards which can be redeemed while booking tickets for a flight. So these are just like instant discounts. As in the case of instant discounts, no taxability will arise on frequent flyer miles whether they are linked with the business or profession or not. These rewards can also be availed by way of instant reduction from the billed amount, in which case no taxability shall arise. In both the cases if these rewards are linked with the business or profession carried on by the assessee, he can claim only net expenditure as business expense.

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initial years there was some ambiguity livemint.com/Money/XAXoAxmHy48YTcdzjwDKqK/Most-cashbacks-will-not-be-taxed.html

wherever these were treated as personal receipts and not in the nature of business enterprise.

but even then, the receipts need to be booked/shown as such. and even internationally the deductions eligibility criteria goes down accordingly.
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A senior banker in Mumbai unexpectedly received a letter from the Income Tax Department seeking scrutiny of his account. Surprised, he contacted his chartered accountant who rechecked his books and found an unaccounted credit of Rs 1,500.

“I actually had received it as a cashback for some transaction that I had done with my debit card. It was too small for my attention but then I did receive a notice against that,“ said the banker who did not wish to be identified.

While customers nowadays look for cashback deals during purchases, they usually forget that in some cases, it can be considered a source of income and can be taxable.Although these amounts are mostly too small for the tax department’s notice, big cashbacks such as a 100% return against international flight tickets, foreign hotel bookings or even large consumer durable purchases made online can be significant, chartered accountants say .

“Technically speaking, cashbacks should be included as income from other sources under Section 56 of the Income Tax Act. It should be taxable as there is no exemption available as per the act. However, since the amounts are usually small they slip out of notice in most cases, but it is a good habit for consumers to keep a tab on the total amount received as cashbacks,“ said Harsh Roongta, a chartered accountant and investment advisor.

While cashbacks are often perceived as discounts on purchases, in many cases it can be a direct credit into the bank account against a specific payment, especially in case of business transactions.

“Cashbacks received in case of personal consumption are mostly used to reduce expenses, but if any of the expenses are being claimed against business accounts, then such cashbacks should be taxable as business or professional receipts,“ said Arvind Rao, a chartered accountant with Arvind Rao & Associates.

Earlier, cashbacks and reward points were typically associated with credit cards and adjusted against dues. Now, bankers are offering reward points on debit card transactions as well in order to take the fight to mobile wallets.

“Sometimes, banks give you reward points which allow you to redeem them only at specific places and for buying something specific.But now we are making an attempt to make customer interaction a better experience by making it as a direct credit into the bank account, which makes our customers feel more satisfied,“ said Mridul Sharma, head of technology at IndusInd Bank.

IndusInd Bank and a few others are trying to lure people into using their cards for payments to build brand loyalty by direct cashback into their savings accounts.However, a direct credit into accounts is bound to bring it to the notice of taxmen, in which case, it needs to be reported.

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Lo ab aur Achche Din… sad evil

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Paytm Users

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vijkap201 wrote:

Lo ab aur Achche Din… sad evil

It was abolished in 1998 by vajpayee & reintroduced in 2004 by manmohan singh

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arun27081012269 wrote:

It was abolished in 1998 by vajpayee & reintroduced in 2004 by manmohan singh

bhans ki ankh… evil
.
T: Bull’s eye… evil

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vijkap201 wrote:

bhans ki ankh… evil
.
T: Bull’s eye… evil

Red Bull…

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lazyboii wrote:

Paytm Users

not just them wink

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vijkap201 wrote:

Lo ab aur Achche Din… sad evil

but it was always the same.
then why so much angst?
it IS ‘other income’ or ‘income from other sources’




“income”

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Ok it’s over 50k only  . No report if below that

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THIS IS REALLY PATHETIC rage

Og2feqi
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Vote dalte waqt ye sab bhulna mat mitron smile

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vijkap201 wrote:

Lo ab aur Achche Din… sad evil

2014-2015 >> Mobiles were taxed @ 4.95%
2018-2019 >> Mobiles @ 12%

Monitors above 20 inches @ 28% biggrin

I checked the online invoice for various products, almost all products are taxed at very high rates.


Recently bought a monitor, around Rs.5000 under a deal

and tax is around Rs.1411 biggrin

High taxes, high fuel rates, bad dollar to Rs. conversion rates, bad roads

And Grand World Tour in ON smile

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Original wrote:

2014-2015 >> Mobiles were taxed @ 4.95%
2018-2019 >> Mobiles @ 12%

Monitors above 20 inches @ 28% biggrin

I checked the online invoice for various products, almost all products are taxed at very high rates.


Recently bought a monitor, around Rs.5000 under a deal

tax is around Rs.1411 biggrin

Kitne laptop, computer kharidte rehte ho @Original bhai? … sad

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Original wrote:

2014-2015 >> Mobiles were taxed @ 4.95%
2018-2019 >> Mobiles @ 12%

Monitors above 20 inches @ 28% biggrin

I checked the online invoice for various products, almost all products are taxed at very high rates.


Recently bought a monitor, around Rs.5000 under a deal

and tax is around Rs.1411 biggrin

High taxes, high fuel rates, bad dollar to Rs. conversion rates, bad roads

And Grand World Tour in ON smile

Cashback is like a discount, how they can tax that confused

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Original wrote:

Cashback is like a discount, how they can tax that confused

Man any specific reason for reviving 5 month old thread and that too by quoting your own statement??
Note: there are only 2 truth in this world, death and tax. You can’t escape from either one. Just pray a specific party don’t win this election otherwise to get 3.6 lakh crores rupees, middle calss will be taxed again because we are the cash cow for political party schemes.

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Original wrote:

Cashback is like a discount, how they can tax that confused

I think they can tax the air you breathe.. it just needs some table beating by our great democratic system. And just look around, no one among 150 cr has got any spine to question like you did..

WE SHOULD CHOOSE CAREFULLY WHILE PRESSING THE BUTTON.

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DaBomb wrote:

Man any specific reason for reviving 5 month old thread and that too by quoting your own statement??
Note: there are only 2 truth in this world, death and tax. You can’t escape from either one. Just pray a specific party don’t win this election otherwise to get 3.6 lakh crores rupees, middle calss will be taxed again because we are the cash cow for political party schemes.

I received notification that one dimer liked my comment after 5 months biggrin

And after reading this, I found, I did not speak on the actual topic smile

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deb3l wrote:

I think they can tax the air you breathe.. it just needs some table beating by our great democratic system. And just look around, no one among 150 cr has got any spine to question like you did..

WE SHOULD CHOOSE CAREFULLY WHILE PRESSING THE BUTTON.

If you have time, then read this article >> https://www.theguardian.com/business/2018/dec/0...


You’ll find that people there protest against the government even when they are just in their teenage grinning

The 17-year-old was one of the thousands of students criticised by Prime Minister Scott Morrison for skipping school to stage national strikes calling for immediate action on climate change just over a week ago.

This week he was among the students who travelled to Canberra for a sit-in in parliament to confront Morrison over the issue.

“We are preparing to show our leaders that we will not stand for their inaction,” he said.

April McCabe, 24, said there is a growing sense of urgency among university and high school students who want their governments to do more to tackle climate change.

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Original wrote:

If you have time, then read this article >> https://www.theguardian.com/business/2018/dec/0...


You’ll find that people there protest against the government even when they are just in their teenage grinning

The 17-year-old was one of the thousands of students criticised by Prime Minister Scott Morrison for skipping school to stage national strikes calling for immediate action on climate change just over a week ago.

This week he was among the students who travelled to Canberra for a sit-in in parliament to confront Morrison over the issue.

“We are preparing to show our leaders that we will not stand for their inaction,” he said.

April McCabe, 24, said there is a growing sense of urgency among university and high school students who want their governments to do more to tackle climate change.

Protesters marched in Melbourne, Sydney, Brisbane and Cairns on Saturday, just a week after 15,000 school students demonstrated against government inaction on climate change.

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Original wrote:

Protesters marched in Melbourne, Sydney, Brisbane and Cairns on Saturday, just a week after 15,000 school students demonstrated against government inaction on climate change.

And our media is all busy with paid news/propaganda
56 inch ka seena, acche din, and with other faltu taglines.


We are bound to lose on the world stage if this continues.

And what I found, even youth from rural areas get involved in all this and waste their time rolleyes


Even in 2019, votes can be controlled on the name of religion,
how sick is that confused

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Original wrote:

If you have time, then read this article >> https://www.theguardian.com/business/2018/dec/0...


You’ll find that people there protest against the government even when they are just in their teenage grinning

The 17-year-old was one of the thousands of students criticised by Prime Minister Scott Morrison for skipping school to stage national strikes calling for immediate action on climate change just over a week ago.

This week he was among the students who travelled to Canberra for a sit-in in parliament to confront Morrison over the issue.

“We are preparing to show our leaders that we will not stand for their inaction,” he said.

April McCabe, 24, said there is a growing sense of urgency among university and high school students who want their governments to do more to tackle climate change.

Bro, it’s from Australia and I was talking about India. And these protests are from the start when Mr. Gujju part2 started his venture of exploitation there, even with change of govt.. lol

Here in India such protests are never been heard.. forget about the coverage. The last mile of media (SM) is slowly being captured by the capitalists/ fascists and the last nail of the coffin is being put by the legislature.

Just read below links for better clarity:

Ref1:

https://sabrangindia.in/article/10000-jharkhand...

Ref2:

https://www.newsclick.in/opposition-questions-j...

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