Withdraw your credit/Gift card money to your bank account without any fees

dude i dint know abt the date 22nd as u never mentioned. mine got transferred in a single day. if u had withdran more than 3000 in april then the money is gone in the original account of payemnt so better check that & it takes 7-10 days if it goes in original acct its clearly mentioned in T&C

dude ask citrus guys, i am not their CC representative. i have the same info as u as our source is the same T&C page.

@don121 You are/were looking at this all wrong. Getting your credit card money converted to cash will not reduce your balance. In fact, it will actually increase it. When we talk about “withdrawing” money from a credit card, we are actually referring to routing the money through an e-wallet/payments processor to finally get it in a savings/current bank account. Once you get it in your bank, you will have the freedom to do whatever you want with it, whether it be paying a credit card bill or spending it at places that only accept cash. If you do pay the credit card bill for the same card that you “withdrew” this money from, keep in mind that you will not reduce the balance at all, you will actually increase it by your withdrawal amount. [Edit: As pointed out by others, this might help you meet the minimum payment required if you unfortunately end up in a tight financial situation.]

This so-called withdrawal will be treated like any other expense as far as your credit card statement is concerned. But there might be some tax implications of doing such credit card “withdrawals” in the future once the ITD and RBI catch up to what all can be done with the e-wallets. You see, the money received in your savings/current account might be seen as undisclosed income by the ITD in the absence of proper tracking to show otherwise.

This could seem lucrative to some users who do realize what all can be done with interest free money for upto 52 days. In fact, I personally know some people in the US who churn the balance-transfer offers in their credit cards to make some cool side money. Keep in mind I am talking about people who have credit card limits of around a quarter million dollars. I will not discuss/disclose exactly how they do that because it’s not allowed (and probably illegal) in India. Until the 2008 financial crisis, US banks frequently gave balance transfer offers with 0% interest rate and 0 processing fees for upto two years. Those offers disappeared for a few years after the crisis, but now they are back to normal.

@saurabh1 Are you a CA or are you studying to be one?

@cybertechie Do you have any real experience with this? I am even concerned about the large amounts of cashbacks (Mobikwik/Paytm) I have received. I think everything would be cool as long as I don’t withdraw the cashbacks to my bank. But what about the cashbacks directly to credit/debit cards via Amazon offers?

@1cooldesidd Did you talk to your CA about the cashbacks yet?

@soccergiants Do you have any insights about the tax implications of cashbacks?

@DealSeeker wrote:

@don121 You are/were looking at this all wrong. Getting your credit card money converted to cash will not reduce your balance. In fact, it will actually increase it. When we talk about “withdrawing” money from a credit card, we are actually referring to routing the money through an e-wallet/payments processor to finally get it in a savings/current bank account. Once you get it in your bank, you will have the freedom to do whatever you want with it, whether it be paying a credit card bill or spending it at places that only accept cash. If you do pay the credit card bill for the same card that you “withdrew” this money from, keep in mind that you will not reduce the balance at all, you will actually increase it by your withdrawal amount. [Edit: As pointed out by others, this might help you meet the minimum payment required if you unfortunately end up in a tight financial situation.]

This so-called withdrawal will be treated like any other expense as far as your credit card statement is concerned. But there might be some tax implications of doing such credit card “withdrawals” in the future once the ITD and RBI catch up to what all can be done with the e-wallets. You see, the money received in your savings/current account might be seen as undisclosed income by the ITD in the absence of proper tracking to show otherwise.

This could seem lucrative to some users who do realize what all can be done with interest free money for upto 52 days. In fact, I personally know some people in the US who churn the balance-transfer offers in their credit cards to make some cool side money. Keep in mind I am talking about people who have credit card limits of around a quarter million dollars. I will not discuss/disclose exactly how they do that because it’s not allowed (and probably illegal) in India. Until the 2008 financial crisis, US banks frequently gave balance transfer offers with 0% interest rate and 0 processing fees for upto two years. Those offers disappeared for a few years after the crisis, but now they are back to normal.

@saurabh1 Are you a CA or are you studying to be one?

@cybertechie Do you have any real experience with this? I am even concerned about the large amounts of cashbacks (Mobikwik/Paytm) I have received. I think everything would be cool as long as I don’t withdraw the cashbacks to my bank. But what about the cashbacks directly to credit/debit cards via Amazon offers?

@1cooldesidd Did you talk to your CA about the cashbacks yet?

@soccergiants Do you have any insights about the tax implications of cashbacks?

@don121 Calling this a withdrawal is a misnomer not to be mistaken for a cash advance on a credit card, wherein you withdraw cash from ATM using your CC, which attracts the highest interest rates. This in fact is a sale and then a transfer of that cash/credit to a bank account via third party tools you could say.

As for churning money using credit cards, forget that in India(but if someone wants to know what the “Seeker” is talking about then check out fatwallet.com, some threads might still be around on that site) as the majority of the sentiment in India seems to be that having credit cards leads to frauds and debt traps, on which subject all I have to say is if you can’t keep control of your finances, then don’t use a CC, but don’t call it a debt trap and as for CC frauds, thieves can break into your bank or house and steal your money too, you can’t just say that its safer not to use a CC.

As for cashback offers in eWallets, it is a form of income, but even IT depts or CAs currently would not know how to categorize these, but to be safe if you do withdraw it to a bank account, then better to keep records of some sort, so as to be able to track/show when needed.

In the case of cashback to CC/DC, if its in lieu of shopping, then you indirectly say its a discount and not exactly a source of income, but then again its better to keep records, if possible, if your yearly total cashback is substantial.

@DealSeeker No, I did not speak to my CA yet, but he is an old traditional one and not a whiz kid so he would not even be aware of what I am talking about. As I said above if the cashback/withdrawal is to your CC/bank and its substantial annually, then better so keep records, just in case. AFAiK, you and I seem to be the only ones here who are even thinking about the tax implications in more than a passing mention.

@1cooldesidd wrote:
…
…the majority of the sentiment in India seems to be that having credit cards leads to frauds and debt traps, on which subject all I have to say is if you can’t keep control of your finances, then don’t use a CC, but don’t call it a debt trap and as for CC frauds, thieves can break into your bank or house and steal your money too, you can’t just say that its safer not to use a CC.
…

@1cooldesidd wrote:
…
@DealSeeker …AFAiK, you and I seem to be the only ones here who are even thinking about the tax implications in more than a passing mention.

Actually, I think @saurabh1 and/or @Gurnani were the first ones to bring this subject to my notice.

I don’t know who brought the tax implications first, but I always ask the question myself whenever there is loop/trick which involves playing with cash in bank account.

Don’t mess with your bank statements for the sake of cashback offers.

Btw, @DealSeeker I am studying CA

@Dealseeker Thanks for replying !!

Btw Whats that special with credit card??
We can load money from Debit card / NetBanking also and take money in bank for paying credit card bill? isnt it?

@DealSeeker wrote:

@1cooldesidd wrote:
…
@DealSeeker …AFAiK, you and I seem to be the only ones here who are even thinking about the tax implications in more than a passing mention.

Actually, I think @saurabh1 and/or @Gurnani were the first ones to bring this subject to my notice.

I have actually been reporting some of the promotional cashback, for example, ICICI promotions where you get 100 rupees or more credited to your bank account for spending a certain amount using CC/DC, as addtional income for the past two-three years. It doesn’t amount to much but I have reported it. This year I have around 10K credited to my CC account, so am going to report that too.

@don121 wrote:

@Dealseeker Thanks for replying !!

Btw Whats that special with credit card??
We can load money from Debit card also and take money in bank for paying credit card bill? isnt it?

Bro, I am going to control my basal instinct to say something funny because you genuinely seem to be really new to the world of credit cards and online banking.

When you load money from a debit card to an eWallet and then subsequently withdraw it, you basically make your own money sitting in your savings/current account take a round-trip for no gain. On the other hand, the money (credit limit) on your credit card is not owned by you and is a kind of loan that you could utilize interest free for upto 52 days. You missed this basic fact.

Banks don’t report to Income Tax Department regarding Amount Recieved through Banking Mode and Cashback recieved is through this mode only . Banks report all accounts in which there is Cash Deposit of More than 10 lacs as AIR Transaction . Also all Credit Card Companies have to report to ITD if you have spent more than 2 lacs in a year.

Only way you are in trouble if it is taken up for scrutiny and have to explain genuinety of Transaction.
There is no clear provision regarding this in Income Tax and Many CAs don’t even know. It can be taxed on income from other sources since this is residual head.

@saurabh1 wrote:

I don’t know who brought the tax implications first, but I always ask the question myself whenever there is loop/trick which involves playing with cash in bank account.

Don’t mess with your bank statements for the sake of cashback offers.

Btw, @DealSeeker I am studying CA

As far as I remember this topic first came into light when paytm officially started allowing its users to withdraw paytm cash to bank for 0%
MAny ( like me) started debit – credit from paytm to bank and back to paytm to get that extra 4%

@soccergiants wrote:

Banks don’t report to Income Tax Department regarding Amount Recieved through Banking Mode and Cashback through this mode . Banks report all accounts in which there is Cash Deposit of More than 10 lacs as AIR Transaction . Also all Credit Card Companies have to report to ITD if you have spent more than 2 lacs in a year.

Only way you are in trouble if it is taken up for scrutiny and have to explain genuinety of Transaction.
There is no clear provision regarding this in Income Tax and Many CAs don’t even know. It can be taxed on income from other sources since this is residual head.

Thanks for the input SoccerGiants. How sure are you about all CC companies having to report expenditure of more than 2 lacs a year?

@1cooldesidd wrote:

@soccergiants wrote:

Banks don’t report to Income Tax Department regarding Amount Recieved through Banking Mode and Cashback through this mode . Banks report all accounts in which there is Cash Deposit of More than 10 lacs as AIR Transaction . Also all Credit Card Companies have to report to ITD if you have spent more than 2 lacs in a year.

Only way you are in trouble if it is taken up for scrutiny and have to explain genuinety of Transaction.
There is no clear provision regarding this in Income Tax and Many CAs don’t even know. It can be taxed on income from other sources since this is residual head.

Thanks for the input SoccerGiants. How sure are you about all CC companies having to report expenditure of more than 2 lacs a year?

@soccergiants wrote:

@1cooldesidd wrote:

@soccergiants wrote:

Banks don’t report to Income Tax Department regarding Amount Recieved through Banking Mode and Cashback through this mode . Banks report all accounts in which there is Cash Deposit of More than 10 lacs as AIR Transaction . Also all Credit Card Companies have to report to ITD if you have spent more than 2 lacs in a year.

Only way you are in trouble if it is taken up for scrutiny and have to explain genuinety of Transaction.
There is no clear provision regarding this in Income Tax and Many CAs don’t even know. It can be taxed on income from other sources since this is residual head.

Thanks for the input SoccerGiants. How sure are you about all CC companies having to report expenditure of more than 2 lacs a year?

There is AIR report which has to filed every year by Specific entities for which last date is 30 sep . Not only Credit Card cos but also Mutual Funds AMCs have to report if you invested more than 2 lacs in their funds.

@DealSeeker wrote:

@soccergiants wrote:

@1cooldesidd wrote:

@soccergiants wrote:

Banks don’t report to Income Tax Department regarding Amount Recieved through Banking Mode and Cashback through this mode . Banks report all accounts in which there is Cash Deposit of More than 10 lacs as AIR Transaction . Also all Credit Card Companies have to report to ITD if you have spent more than 2 lacs in a year.

Only way you are in trouble if it is taken up for scrutiny and have to explain genuinety of Transaction.
There is no clear provision regarding this in Income Tax and Many CAs don’t even know. It can be taxed on income from other sources since this is residual head.

Thanks for the input SoccerGiants. How sure are you about all CC companies having to report expenditure of more than 2 lacs a year?

There is AIR report which has to filed every year by Specific entities for which last date is 30 sep . Not only Credit Card cos but also Mutual Funds AMCs have to report if you invested more than 2 lacs in their funds.

I can vouch for that 2 Lacs threshold. To be technically correct, the ITD gets notified if you make payments to a credit card account in excess of 2 Lacs.

What happens if you hold 4 credit cards & make a transactions of 1 lac on each card? It won’t get reported as transaction in individual cards won’t cross the 2 lacs?? or ITD can pull it up as combine transactions value crossed 2 lacs????

@dealsnatcher wrote:

@DealSeeker wrote:

@soccergiants wrote:

@1cooldesidd wrote:

@soccergiants wrote:

Banks don’t report to Income Tax Department regarding Amount Recieved through Banking Mode and Cashback through this mode . Banks report all accounts in which there is Cash Deposit of More than 10 lacs as AIR Transaction . Also all Credit Card Companies have to report to ITD if you have spent more than 2 lacs in a year.

Only way you are in trouble if it is taken up for scrutiny and have to explain genuinety of Transaction.
There is no clear provision regarding this in Income Tax and Many CAs don’t even know. It can be taxed on income from other sources since this is residual head.

Thanks for the input SoccerGiants. How sure are you about all CC companies having to report expenditure of more than 2 lacs a year?

There is AIR report which has to filed every year by Specific entities for which last date is 30 sep . Not only Credit Card cos but also Mutual Funds AMCs have to report if you invested more than 2 lacs in their funds.

I can vouch for that 2 Lacs threshold. To be technically correct, the ITD gets notified if you make payments to a credit card account in excess of 2 Lacs.

What happens if you hold 4 credit cards & make a transactions of 1 lac on each card? It won’t get reported as transaction in individual cards won’t cross the 2 lacs?? or ITD can pull it up as combine transactions value crossed 2 lacs????

@soccergiants wrote:
4 different companies CC.
No they can’t. Because they will not report.
The best root to escape reporting.
“Prevention is better than cure”

Makes sense. You meant to say the “best route”, right? Are you a CA by profession?

@DealSeeker wrote:

@soccergiants wrote:
4 different companies CC.
No they can’t. Because they will not report.
The best root to escape reporting.
“Prevention is better than cure”

Makes sense. You meant to say the “best route”, right? Are you a CA by profession?

@DealSeeker wrote:

I can vouch for that 2 Lacs threshold. To be technically correct, the ITD gets notified if you make payments to a credit card account in excess of 2 Lacs.

Is that a single payment of 2 lacs or cumulative payments of 2 lacs or more in a financial year?

@1cooldesidd wrote:

@DealSeeker wrote:

I can vouch for that 2 Lacs threshold. To be technically correct, the ITD gets notified if you make payments to a credit card account in excess of 2 Lacs.

Is that a single payment of 2 lacs or cumulative payments of 2 lacs or more in a financial year?

@DealSeeker wrote:
I can vouch for that 2 Lacs threshold. To be technically correct, the ITD gets notified if you make payments to a credit card account in excess of 2 Lacs.

is this 2 Lacs limit per year or per transaction? Thanks for bringing this up. I was not aware of this rule.

@cybertechie wrote:

@DealSeeker wrote:
I can vouch for that 2 Lacs threshold. To be technically correct, the ITD gets notified if you make payments to a credit card account in excess of 2 Lacs.

is this 2 Lacs limit per year or per transaction? Thanks for bringing this up. I was not aware of this rule.

Last time i checked my CIBIL score, i was surprised by the amount of data CIBIL maintains. They had details of all my credit cards , Ready credit accounts etc. In-fact they also the data of the exact amount of payment i was making towards each of these cards every month .I would not be very surprised if ITD has access to these data as well

@cybertechie wrote:

@DealSeeker wrote:
I can vouch for that 2 Lacs threshold. To be technically correct, the ITD gets notified if you make payments to a credit card account in excess of 2 Lacs.

is this 2 Lacs limit per year or per transaction? Thanks for bringing this up. I was not aware of this rule.

@cybertechie wrote:

@DealSeeker wrote:
I can vouch for that 2 Lacs threshold. To be technically correct, the ITD gets notified if you make payments to a credit card account in excess of 2 Lacs.

is this 2 Lacs limit per year or per transaction? Thanks for bringing this up. I was not aware of this rule.

@cybertechie wrote:

Last time i checked my CIBIL score, i was surprised by the amount of data CIBIL maintains. They had details of all my credit cards , Ready credit accounts etc. In-fact they also the data of the exact amount of payment i was making towards each of these cards every month .I would not be very surprised if ITD has access to these data as well

What if ITD ask CIBIL to just send the PAN info of all guys whose cumulative spends across cards cross 2lacs
Anyway if you are salaries person and shows earning more then that amount then it wont be much problem.

@cybertechie wrote:

Last time i checked my CIBIL score, i was surprised by the amount of data CIBIL maintains. They had details of all my credit cards , Ready credit accounts etc. In-fact they also the data of the exact amount of payment i was making towards each of these cards every month .I would not be very surprised if ITD has access to these data as well

where can i see my cibil score free ?

my sbi card rejected because of low cibil score.

@dd2014 wrote:

@cybertechie wrote:

Last time i checked my CIBIL score, i was surprised by the amount of data CIBIL maintains. They had details of all my credit cards , Ready credit accounts etc. In-fact they also the data of the exact amount of payment i was making towards each of these cards every month .I would not be very surprised if ITD has access to these data as well

where can i see my cibil score free ?

my sbi card rejected because of low cibil score.

@soccergiants wrote:

@dd2014 wrote:

@cybertechie wrote:

Last time i checked my CIBIL score, i was surprised by the amount of data CIBIL maintains. They had details of all my credit cards , Ready credit accounts etc. In-fact they also the data of the exact amount of payment i was making towards each of these cards every month .I would not be very surprised if ITD has access to these data as well

where can i see my cibil score free ?

my sbi card rejected because of low cibil score.

It is not free. You have to pay for getting score

how much it will cost ?

can i improve my score for giving money ??

@dd2014 wrote:

@soccergiants wrote:

@dd2014 wrote:

@cybertechie wrote:

Last time i checked my CIBIL score, i was surprised by the amount of data CIBIL maintains. They had details of all my credit cards , Ready credit accounts etc. In-fact they also the data of the exact amount of payment i was making towards each of these cards every month .I would not be very surprised if ITD has access to these data as well

where can i see my cibil score free ?

my sbi card rejected because of low cibil score.

It is not free. You have to pay for getting score

how much it will cost ?

can i improve my score for giving money ??