Credit card used by a friend how to show that while tax filing and Credit Card Default and its implication in CIBIL

Ajay Gulati
Chartered Accountant( CA)

Ajay Gulati & Co
C-66 Shivalik, First Floor
New Delhi-110017
Mobile     :9811079215
Land-Line : 011-49539335


GOOGLE MAP LOCATION LINK



Query asked on 

Hi, I have a credit card with 3L limit and its generally used by my friend on an average of 2L per month. Then he pays it directly to my card. I don't prefer that same to get transfer into my bank accounts. Roughly it gets to 18-20L per year. I am a salaried person working with a private company. My salary is 18L per annum. Does the transaction by my friend from my card will be considered as mine. How to show that while filing tax that the spends done by my friend and not mine. Please ADVICE.

 Reply
Principally you should not allow this as this complicates the transaction and you may land into tax trouble.

It is good thing that these are being paid by your friend directly. Pl tell your friend to keep all invoice and evidences which prove to the fact that it is his expense. For example if he has done car service on your card, the service record should show his car no. Similarly , if he is paying phone bill, the phone should be in his name . You can easily find the way in which it can be proved that expense are his except for eating outside which may not be very material.



Take a letter on record from him that he has incurred his expense on your card and those are being paid by him directly. Better to take a quarterly letter from him specifying the amount of expenses incurred.  Quote PAN number in the letter and his ward.

All said and done still i have not understood, if he is incurring so much, why can not he get card in his personal name and avoid all this??

 Any default in this card happening shall affect your CIBIL score and credit rating. (
www.cibil.com .  Please note that the bank before considering loan application are compulsorily required to check CIBIL rating and if it falls below certain points ( 750) , the applicaiton for loan is not even entertained.  Bad CIBIL rating might have other implicaitons also in the long term and you shall take long time to correct it and till then all the facilities shall be denied . Follow the below links on CIBIL


https://www.transunioncibil.com/about-us/about-transunion-cibil

 https://www.cibil.com/creditscore/cibilscore-form-ggcs?gclid=Cj0KEQjw2LjGBRDYm9jj5JSxiJcBEiQAwKWACw9jm7JGrVQpr6xqgpVI9P1pfthvAPhCTH5fAStcH9oaAnBq8P8HAQ&dclid=CKOij6qz5NICFRGijgodUHMKeg

 http://trak.in/tags/business/2017/01/11/home-loan-interest-rates-credit-score-linked/

 https://creditsmart.in/you-need-this-cibil-score-for-an-sbi-home-loan/

Thanks

Ajay Gulati
Chartered Accountant( CA)

Ajay Gulati & Co
9811079215
Delhi
ajaygulati.ca@gmail.com
hiall1500@gmail.com

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