When Do Banks Report Your Credit Card Bill Payments to the Income Tax Department?

Your credit card bill payments may be reported to the Income Tax Department when they cross specified thresholds during a financial year. Here’s how the reporting works, how multiple cards from the same bank are treated, and where you can check the information.

Credit cards are increasingly used for everything from everyday purchases to travel, insurance, education and large-ticket expenses.

But once your annual credit card bill payments become substantial, your card issuer may be required to report those transactions to the Income Tax Department.

For non-cash payments, the reporting threshold is ₹10 lakh or more during a financial year.

For cash payments towards credit card bills, the threshold is much lower at ₹1 lakh or more.

A financial year runs from 1 April to 31 March.

Here’s how this works in practice.

What is the ₹10 lakh credit card reporting threshold?

If payments made towards your credit card bills through modes other than cash aggregate to ₹10 lakh or more during a financial year, the card issuer reports the information to the Income Tax Department.

The important thing to understand is that the threshold is based on payments towards the credit card, not simply on the number of cards you hold.

It can also apply to the combined payments made against multiple cards issued by the same bank.

Let’s look at a few examples.

Scenario 1: One credit card, payments below ₹10 lakh

Suppose you hold one credit card issued by A1 Bank.

During the entire financial year, your total non-cash payments towards that card are less than ₹10 lakh.

In this case, there is no reporting under the ₹10 lakh non-cash threshold.

Scenario 2: Multiple cards from the same bank, total below ₹10 lakh

Suppose you have two or more credit cards issued by B2 Bank.

Your combined payments towards all those cards during the financial year are still below ₹10 lakh.

Again, there is no reporting under the ₹10 lakh non-cash threshold.

The number of cards itself does not determine whether the threshold has been crossed.

Scenario 3: One credit card with payments of ₹10 lakh or more

Now suppose you hold one credit card from C3 Bank.

Your payments towards that card during the financial year aggregate to ₹10 lakh or more through non-cash modes.

The bank will report the transaction information to the Income Tax Department.

Scenario 4: Multiple cards from the same bank cross ₹10 lakh together

This is an important one.

Suppose you have multiple credit cards issued by D4 Bank.

Individually, your payments on each card may be below ₹10 lakh.

However, if your combined payments across cards issued by D4 Bank reach ₹10 lakh or more during the financial year, the bank will report the information to the Income Tax Department.

So, for example:

The aggregate payment is ₹11 lakh, so the reporting threshold is crossed.

What about cash payments towards credit card bills?

Cash payments have a separate and substantially lower reporting threshold.

If you make ₹1 lakh or more in cash payments towards credit card bills during a financial year, those payments are reportable.

So remember:

These thresholds apply over the relevant financial year.

Does crossing ₹10 lakh mean you have done something wrong?

No.

Crossing the reporting threshold does not automatically mean there is a tax problem.

It means information relating to the transaction may be available with the Income Tax Department.

If required during scrutiny or assessment, you may be asked to explain your spending or the source of funds used to make those payments.

If the expenses are genuine and your source of funds can be reasonably explained, the reporting itself should not be a cause for concern.

When can credit card payments become a problem?

Questions can arise when there is a significant mismatch between:

your reported income or known sources of funds

and

the level of spending or credit card bill payments reported against you.

For example, unusually high card payments may be harder to explain where they involve:

• unreported income,
• manufactured spending,
• transactions that do not have a genuine commercial purpose, or
• spending that is inconsistent with the person’s disclosed financial profile.

This is why the source of funds matters just as much as the card transaction itself.

Good practices for high credit card spends

Using a credit card heavily is not inherently a problem.

But if your annual spends and bill payments are substantial, maintaining basic financial discipline becomes increasingly important.

You should:

• use credit cards for genuine and valid transactions,
• be able to explain the source of funds used to repay large bills,
• avoid manufactured spending,
• retain invoices for large purchases, and
• maintain appropriate financial records where necessary.

The objective is straightforward: if a transaction is ever questioned, you should be able to explain what the expense was and how it was funded.

How can you check whether your credit card payments were reported?

For FY 2025-26 and earlier, you can check your Annual Information Statement (AIS) on the Income Tax Department’s e-filing portal.

Step 1

Log in to the Income Tax Department’s e-filing portal at incometax.gov.in.

Step 2

Open your Annual Information Statement (AIS).

Step 3

Select the relevant financial year.

Step 4

Look under the Statement of Financial Transactions (SFT) section.

Credit card payment information is reported under:

SFT-006: Payment for credit card

This is where reported credit card bill payment information can appear in your AIS.

What changes from Tax Year 2026-27?

There is also an important change for newer tax periods.

For Tax Year 2026-27 onwards, the Annual Information Statement under the new Income-tax Act is Form No. 168.

It includes information relating to specified financial transactions.

For older periods up to AY 2026-27, the existing AIS continues to apply.

So depending on the period you are checking, the way the information is presented may differ.

The bottom line

Large credit card payments are not something you need to fear simply because they cross a reporting threshold.

The important distinction is between reporting and tax liability.

If your credit card bill payments cross the applicable threshold, the information may be reported to the Income Tax Department. That does not by itself establish that additional tax is payable or that anything improper has occurred.

What matters is whether your transactions are genuine and whether you can reasonably explain the source of funds used to make those payments.

If you regularly put large expenses on credit cards, keep your transactions clean, maintain records for significant purchases and make sure your spending is consistent with sources of funds you can substantiate.