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Got income tax notice for credit card spends

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palkunal376917
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
Commentator Commentator
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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.

Deal Lieutenant Deal Lieutenant
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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
Deal Subedar Deal Subedar
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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. 

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Ask your CA that if you switch from ITR1 to ITR3 by showing those transactions as some small business, it may solve your issue @Atlantic

Shopping Friend Shopping Friend
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he said he could only do anything further after notice is received
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Tax Wizard Tax Wizard
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What to do for credit card transactions showing in AIS ?

1. Keep all credit card bills of the FY 22-23 filed in a place or in e format.
2. Compute rewards earned ( some statements show the rewards earned in each cycle )
3. Keep these details ready.

Reduce your credit card transactions from this year.

It is too late to revise return and just cant show everything in ITR 3. It depends on case to case basis.

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