Credit cards have become a daily convenience, whether for shopping, bill payments, or emergencies. But did you know letting friends use your credit card can land you in trouble with the income tax department? Here’s how to stay safe.
1. Understand the risk
The it department monitors high-value transactions and suspicious spending patterns. If someone else uses your card for purchases, it may:
· trigger scrutiny of your income
· lead to an it notice for unexplained transactions
· cause unnecessary stress or legal complications
2. Avoid sharing your credit card
No matter how close the friend, never share your card or pin. Even small purchases can accumulate and show as high expenses, raising red flags with the authorities.
3. Use authorized add-on cards
If you really want a friend or family member to use a card, consider getting an add-on card issued by the bank. This:
· maintains separate spending records
· keeps your main card safe
· avoids unnecessary it scrutiny
4. Keep receipts and proof of transactions
If a shared card transaction is unavoidable, maintain invoices, receipts, and communication as proof. This helps you justify expenses if the it department questions your spending.
5. Monitor statements regularly
Check your credit card statements frequently. Immediate detection of unauthorized or shared usage can help you dispute charges and prevent further issues.
6. Report fraudulent or unauthorized use
If someone uses your card without permission:
· inform your bank immediately
· block the card to prevent further misuse
· keep records of communication for reference
7. Understand tax implications
Any high-value purchase using your card is linked to your pan number. The it department assumes it as your personal expense unless proven otherwise. Being cautious protects you from unwanted notices and penalties.
Final tip:
Credit cards are convenient, but personal responsibility is key. Avoid letting friends or acquaintances use your card, or use official channels like add-on cards. Monitoring, proof keeping, and awareness can save you from financial and legal trouble.
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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