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Consolidate Cashback Of Over Rs. 50,000 In A FY Taxable

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To lure more of users to use their particular service and goods, companies across industries are now giving cashbacks, which is a discount offered against expenditure made. And it can be either credited as and when you execute a transaction or after the transaction is completed. And if the sum of all such cashbacks received in a financial year exceeds the value of Rs. 50000, you are taxed for the same.

Consolidate Cashback Of Over Rs. 50,000 In A FY Taxable
 

The cashback amount can be received for transaction via either of the channel such as debit or credit cards, e-wallets, apps or UPI.

It is to be noted that as per Section 56(2) of the income tax Act, any amount over Rs. 50,000 is subject to gift tax and has to be showed in either business or professional income head or income from other sources. Also, to be noted freebies also come within tax net in case purchase is made for business purpose or from one's profession or business. Here the taxation is done as per their market value.

But in case such freebies are obtained in lieu of cashbacks, there arises no taxation implication. And in case when do not declare such cashbacks over Rs.50,000 in your ITF for FY 2018-19, then you will be called for reassessment.

GoodReturns.in

Read more about: cashbacks taxation gift tax business
Story first published: Thursday, June 27, 2019, 9:46 [IST]
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