Credit Card Rules: The scope of digital payments in the country is increasing rapidly and credit cards are no longer limited to metro cities only. Even in Tier-2 and Tier-3 cities, people are using it for daily expenses, online shopping and bill payments. In such a time, some important rules related to credit cards may come into effect from April 1, 2026, which will directly affect taxpayers and card users.
Recently the Income Tax Department has released Draft Income Tax Rules 2026. It is proposed that these new rules will replace the old rules of 1962. The draft includes five major provisions related to credit cards. Whose objective is to make transactions more transparent and to better monitor big expenses.
The most significant change is related to large credit card bill payments. If a person pays a credit card bill of more than Rs 10 lakh in a financial year through non-cash means like UPI, bank transfer or cheque, then the bank or card issuing company will inform the Income Tax Department. Whereas if payment of Rs 1 lakh or more is made in cash, then reporting of the same will also be mandatory. Although such a system existed earlier also, it has been included more clearly in the new rules.
Statement valid in PAN application
Now credit card statement can be accepted as address proof while applying for PAN card, but the condition will be that the statement is not more than three months old. Old statements will not be valid as documents. Through this, an attempt has been made to ensure freshness and authenticity of the documents.
Also read-Stocks Crash: Superhit in IPO, flop in the market! Stock of these 5 companies fell by 80%
ABCD of property tax: How is it calculated and how much penalty is there on late payment, know everything here
Digital option for tax payment
In the new draft rules, credit cards, debit cards and net banking have been recognized as official electronic means for income tax payment. This means that the process of depositing tax will become more digital and convenient. This will provide more payment options to taxpayers and reduce dependence on physical mode.
Tax rules on cards given by company
If an employee has been given a credit card by the company and its expenses like annual fee or membership fee are paid by the company, then it will be considered as perquisite. That means it will be added to the employee’s income and tax will be levied on it. However, if the expenditure is purely related to official work, then tax will not be imposed. For this, the company will have to keep complete records of expenditure, which include date, details of expenditure and proof that the amount was used only for official work.
PAN mandatory for issuing credit cards
Under the proposed rules, it will now be mandatory for any bank or financial institution to obtain the PAN of the applicant before issuing a credit card. A new credit card will not be issued without PAN. This step has been taken with the aim of strengthening monitoring of large transactions.