Credit Card Reward Points
This query is : Resolved
26 September 2021
I have redeemed by Credit card rewards points in FY 20-21 and the same has been adjusted against my credit card outstanding. I want to know whether amount redeemed will be considered income under Income from Other Sources and will be taxed accordingly?
What if instead of encashing I redeemed the reward point for some product (like phone, and other items as per their product catalogue).
Every thing will be used for personal use only.
Please advice
What if instead of encashing I redeemed the reward point for some product (like phone, and other items as per their product catalogue).
Every thing will be used for personal use only.
Please advice
26 September 2021
In general, credit card rewards are considered a discount on a purchase rather than income, so they're not taxable.
26 September 2021
This is a recent US Court judgement. But very relevant to your case. According to me there wouldn't be any tax implications if you encash or buy products.
https://www.taxmann.com/post/blog/6728/redemption-of-credit-card-reward-points-is-a-taxable-income-us-court/
30 September 2021
If the benefits are given in the form of cashback during purchase of any accessories, it is not taxable, but adjusted against price of the product.
But if received as cashback, the same will be regarded as gift (from non relative) and hence taxable in case receipts are more than Rs.50,000/- PA.
But if received as cashback, the same will be regarded as gift (from non relative) and hence taxable in case receipts are more than Rs.50,000/- PA.
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