Your Card issuers will inform the tax department when you cross 10 Lacs spend in a year!

There are over 12 crore active credit cards in India right now. Almost none of those cardholders know that every bank they hold a card with is filing a report on them once a year, and that this has nothing to do with anything they did wrong. Here's the mechanic. Under Rule 114E of the Income Tax Rules, if your credit card payments to a single issuer cross 10 lakh rupees in a financial year, that bank files a Statement of Financial Transaction, SFT, with the income tax department. This is per issuer, not per card. Two HDFC cards with 6 lakh and 5 lakh in spends get added together and cross the line. A single Axis card with 9.5 lakh does not. Where does this land? Your Annual Information Statement, AIS. Log into the income tax e-filing portal, go to AIS, and you'll see it listed under SFT information, bank name, amount, financial year. It has been sitting there the whole time. Most people have simply never opened the tab. ## No alarm goes off This is the part that gets exaggerated into anxiety on WhatsApp forwards. An SFT entry is not a notice. Nobody at the income tax department reads it the day it's filed and picks up a phone. It's a data point sitting next to a few hundred million other data points, waiting to be compared against something. The comparison is the only thing that matters: does your reported income in your ITR make sense next to what you spent on cards. A techie declaring 18 lakh in salary and spending 14 lakh on cards is unremarkable. Someone declaring 6 lakh and spending 22 lakh across three cards is a mismatch, and mismatches are what get looked at, not round numbers by themselves. Worth knowing, since April 2026 PAN linkage is mandatory for new credit cards, and enforcement on this exact mismatch is expected to tighten rather than stay where it was. The rule isn't new. The scrutiny getting sharper is. ## Where people actually get caught Sharing your card is common here, everyone's done it. A friend uses your card for a big purchase to hit your milestone bonus, then pays you back. Nothing wrong with that, on its own. Where it turns into a problem is when the reimbursement is cash, has no record, and the spend then shows up as yours with no paper trail explaining why your card volume doesn't match your income. If your friend transfers the money back to your bank account with a note, that transaction is now on record. If they hand you cash and you deposit it two weeks later mixed in with other cash, you've made the exact mismatch that gets flagged, and you have nothing to explain it with if anyone ever asks. The fix costs nothing: get reimbursed by bank transfer, keep it traceable, done. Second thing, and this one's cleaner cut, never pay a credit card bill in cash above 1 lakh rupees. That's a separate reporting line under the same rule, and it's a much sharper flag than the 10 lakh aggregate, because there's rarely a legitimate reason for a cash card payment that large. If you're anywhere near that number, pay through net banking or a cheque instead. ## What to actually do about it Nothing dramatic. If your income supports your spending, this changes nothing for you, the report exists, it always existed, it just sits quietly unless there's a gap it needs to explain. If you do share cards with friends or family, or run a chunk of household spend through one card because it earns better rewards, keep two things: bank transfer as the repayment mode, and a rough note of what the spend was for if it's a large one-off. That's not paperwork for its own sake, it's the difference between a five-minute clarification and a notice that eats a week. If you want to see the exact mechanics of what your card is earning you against what it costs to run, that's a different question, but knowing your numbers on both sides makes conversations like this easier. Check your current lineup with the [Wallet Analyser](https://valueninja.in/tools/wallet-analyser).