5 income-tax rules for credit card users that may apply from April 1, 2026

The Income-tax Department recently released the draft Income-tax Rules 2026. After final approval, taking into account feedback from various stakeholders, these rules are likely to replace Income-tax Rules under Income-tax Act, 1961 with effect from April 1, 2026.

The draft news rules have at least five important points related to credit cards that may come into effect from April 1 if they are approved. These are:

1)High-value credit card bill payments to be reported

As per the draft rules, payment of credit card bills of over ₹10 lakh through any means other than cash will be reported to the Income-tax Department in the statement of financial transactions by the bank or credit card issuer.

Credit card bills of ₹1 lakh or more paid in cash will also be reported.

Please note that this is not a new rule. The Income-tax Rules under Income-tax Act, 1961 also have a similar provision.

2)You can use your credit card statement as proof of address

As per the draft Rules, credit card statements of not more than three months can be used as the proof of address while applying for the permanent account number (PAN).

3)Credit cards, along with debt card and net banking, are allowed as the electronic mode of payment for taxes.

4)In case of credit cards provided to the employee by the employer as a perquisite, the draft rules have proposed the following:

In this case, the amount to be considered for taxation should be the total value of the benefit reduced by the amount the employee has already paid for using that benefit.

"The value of this perquisite shall be the amount taken to be the value of perquisite chargeable to tax as reduced by the amount, if any paid or recovered from the employee for such benefit or amenity," the draft rules say.

The draft rules further say that there shall be no value of such benefit where expenses are incurred wholly and exclusively for official purposes and the following conditions are fulfilled:

(i) complete details in respect of such expenditure are maintained by the employer which may, inter alia, include the date of expenditure and the nature of expenditure;

(ii) the employer gives a certificate for such expenditure to the effect that the same was incurred wholly and exclusively for the performance of official duties.

5)Permanent account number (PAN) is mandatory when applying for a credit card with a bank or any other credit card issuer.