The Draft Income‑tax Rules, 2026 proposed by the government include several changes affecting how credit card transactions are monitored and used — from high‑value spend reporting to reward points and tax compliance. Note that these changes are draft rules and may be notified officially before April 1, 2026.
🧾 1. High‑Value Credit Card Spending Will Be Reported
Under the draft rules, if your total credit card payments in a financial year (across one or more cards) reach ₹10 lakh or more, banks or card issuers may report this to the Income‑tax Department. This is part of a broader effort to strengthen monitoring of large wallet PLATFORM' target='_blank' title='digital-Latest Updates, Photos, Videos are a click away, CLICK NOW'>digital expenses.
Why it matters: High spending patterns may attract scrutiny from tax authorities, especially if they are not in line with income disclosures.
🆔 2. PAN Mandatory for New Credit Card Applications
From April 1, quoting your PAN card could become mandatory when applying for a new credit card. This links your financial transactions directly with your tax profile for better transparency.
Tip: Make sure your PAN is active and correctly linked with Aadhaar, as inactive cards may affect approvals.
💳 3. Credit Card Statements May Become Valid Address Proof
The new draft rules could allow recent credit card statements (issued within the last few months) to be accepted as official address proof for PAN or other KYC purposes — as long as they show your current address. This will benefit people who may not have traditional utility bills.
💰 4. Paying Income Tax Using Credit Cards Could Be Allowed
Currently, income tax payments generally require net banking or debit card. Under the proposed changes, credit cards may be permitted for income tax payments, offering more payment flexibility. However, applicable processing fees or interest costs may still apply.
Note: Paying taxes with a credit card may incur extra bank charges.
🎁 5. Changes in Reward Points Rules by Issuers (e.g., sbi Card)
Independent of tax rules, major card issuers are updating how reward points work. For example, SBI Card has announced several changes effective April 1, 2026:
- 🔹 Monthly cap of 60,000 reward points when converting points to statement credit
- 🔹 Redemption only in multiples of 4,000 points
- 🔹 Some premium card variants (e.g., air india sbi Signature, PhonePe sbi Card PURPLE/SELECT BLACK) may be exempt from these caps
- 🔹 Revised timelines for forfeiture of promotional reward points.
Impact: This affects how you plan reward redemptions — especially if you earn and redeem points frequently.
🧠 Bonus Tips Before April 1
✔ Update Your PAN & Aadhaar: Ensure they are linked correctly to avoid card application problems.
✔ Track Spending: High annual credit card spends may be reported, so keep records consistent with income declarations.
✔ Understand Reward Limits: Know the monthly cap and redemption multiples to maximise benefits under new issuer rules.
📌 What This Means for Card Users
These proposed changes aim to:
- Enhance tax transparency around credit card use
- Improve documentation and compliance (like using statements as address proof)
- Encourage better tracking of high‑value payments
- Adjust reward redemptions and issuer rules to control liability and consumer behaviour
While exciting for flexibility in payments (like tax payments), the rules also signal closer reporting of financial activity to tax authorities from April 1, 2026 onwards.
Disclaimer:
The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk.
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