ITR SPENDING ON CREDIT CARD 30L APPROX

[ANTESH KHOKER]

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Hello dear community members,
I am seeking advice from any CA or ITR experts here.
I need detailed information regarding my credit card spending in relation to RBI rules. As per my understanding, a credit card holder can spend up to 10 lakh per year, but my spending this year is approximately 30 lakh. I haven't filed any ITR in previous years.
I want to know:

1. If I file a return now, what amount should I declare?
2. What would be the charges or penalties involved?

My higher spending this year is due to purchasing iPhones for my family and friends, as well as shopping for my brother's wedding. I am quite worried and would appreciate any guidance on the process.
This information will be helpful not only for me but for others in a similar situation.
Thank you,Antesh

 

[TaxWiser]

Hello Antesh! Let me provide you with some guidance regarding your credit card spending and the related RBI rules.

1. Credit Card Spending Limit:

• The Reserve Bank of India (RBI) does not specifically set a fixed annual spending limit for credit cards. However, the individual credit card limit, when combined with other unsecured borrowings, should not exceed the permissible unsecured limit for an individual borrower¹.
• Additionally, there is no separate ceiling prescribed by the RBI under the Foreign Exchange Management Act (FEMA) for expenditure incurred through the use of credit cards, whether within India or abroad².

2. Income Tax Return (ITR):

• Since your credit card spending this year is approximately 30 lakh, it's essential to file your Income Tax Return (ITR).
• When filing your ITR, you should declare your total income, including the credit card expenses. The amount you declare should reflect your actual income and expenditures.
• Consult a Chartered Accountant (CA) or tax expert to ensure accurate reporting and compliance with tax regulations.

3. Penalties and Charges:

• If you haven't filed ITR in previous years, there may be penalties for non-compliance. It's crucial to rectify this promptly.
• The specific penalties depend on factors such as the delay in filing, the amount of tax liability, and other circumstances.
• To avoid penalties, file your ITR as soon as possible. The penalties may include interest charges and late filing fees.

4. Document Your Expenses:

• Keep records of your credit card transactions, especially those related to iPhone purchases and wedding expenses.
• Consult with a CA to determine the appropriate category for these expenses (personal or business) and how they impact your tax liability.

Remember, it's always best to seek professional advice from a CA or tax expert to ensure accurate compliance with RBI rules and tax regulations. Your proactive approach will help you avoid unnecessary penalties and maintain financial transparency.

If you have any further questions or need additional assistance, feel free to ask!

 

[ANTESH KHOKER]

THANKYOU SIR

 

[ShavirB]

Here's a refined version of your message to post in the community:

---

Hello dear community members,
I am seeking advice from any CA or ITR experts here.
I need detailed information regarding my credit card spending in relation to RBI rules. As per my understanding, a credit card holder can spend up to 10 lakh per year, but my spending this year is approximately 30 lakh. I haven't filed any ITR in previous years.
I want to know:

1. If I file a return now, what amount should I declare?
2. What would be the charges or penalties involved?

My higher spending this year is due to purchasing iPhones for my family and friends, as well as shopping for my brother's wedding. I am quite worried and would appreciate any guidance on the process.
This information will be helpful not only for me but for others in a similar situation.
Thank you,Antesh

Simple rule is your credit card spends should match your income. If you've spent 30 lakhs on Credit Card, ideally you should be earning north of 50 Lakhs and paying your taxes accordingly. This is what the Department will check. If they find any discrepancy, they could send you a notice