Are Credit Card Reward Points taxable ?
16 Replies
Smit Shah
(524 Points)
Replied 03 January 2021
It like case covered under section 56 if some conditions fulfill then it might be taxable.
also depends on what you got from that reward points.
also depends on what you got from that reward points.
Yogender
(Engineer)
(38 Points)
Replied 03 January 2021
There are several problem with credit card rewards. For e.g.. they may not be convertible to cash. Some of the cards have fees, so in that case even fees should be accounted for. Some credit cards may offer only airmiles, while others have points that will have a different value for travel, different for shopping and a lower for cash. Also reward points can expire if not used. Also bank like YES BANK degraded the value of reward points significantly when it ran into problems. The rewards is also not constant and keeps on changing what you can do with them. So in that case how do we quantify the value.
Smit Shah
(524 Points)
Replied 03 January 2021
If you not received benefits exceeding 50000 than not at all issue.
Yogender
(Engineer)
(38 Points)
Replied 03 January 2021
No, the problem is that it is more than 50K, for e.g. a lakh of airmiles, and so on.
Yogender
(Engineer)
(38 Points)
Replied 03 January 2021
the problem is how to convert airmiles to rupees. Also lets say i get 2L of points that i can use for hotels, or that can be used for 1L of shopping or that can be used for 70K of cash, how do i account for this
Smit Shah
(524 Points)
Replied 04 January 2021
Only cash and some specific properties are taxable as gift under section 56 which not cover that airmiles, hotel benefits etc.
Yogender
(Engineer)
(38 Points)
Replied 04 January 2021
How about shopping ? - Amazon, Flipkart, Croma, Shopper Stop, Restaurant Vouchers, Spa Vouchers, Jewellery Store Vouchers
Smit Shah
(524 Points)
Replied 07 January 2021
Jewellery, bullion etc are taxable if you received them in value excess of Rs.50000
Yogender
(Engineer)
(38 Points)
Replied 07 January 2021
Can I reduce these from the expenses that occurred on my card ?
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