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Old 14th September 2013, 16:22   #1246
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Default Re: The Credit Card Thread

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Originally Posted by engrohit View Post
Amex sent a mail last week mentioning that they are increasing the minimum spend amount from 250 to 1000 for the minimum 4 transactions required per month to earn 1000 points.

I am finding it extremely difficult now to make those 4 transactions with limited acceptance of Amex cards.

Anyone else received such communiqué?
Yes, got the same intimation. Effective 1st October.

I will complete one year, encash the points and then say bye bye to Amex.
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Old 14th September 2013, 23:48   #1247
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Default Re: The Credit Card Thread

I am in a dilemma. My workplace expects me to bear all the expenditures of International & Domestic travels on my personal credit card and later get it reimbursed. Is it a fair practice, considering my monthly credit card bills may be 3-4 times my monthly take home at times and this could come under tax men's lens?
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Old 15th September 2013, 08:23   #1248
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Default Re: The Credit Card Thread

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Originally Posted by pahwa View Post
I am in a dilemma. My workplace expects me to bear all the expenditures of International & Domestic travels on my personal credit card and later get it reimbursed. Is it a fair practice, considering my monthly credit card bills may be 3-4 times my monthly take home at times and this could come under tax men's lens?
This could be very dangerous in case you get selected for Income tax dept review.

Regards,
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Old 15th September 2013, 10:12   #1249
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Quote:
Originally Posted by pahwa View Post
I am in a dilemma. My workplace expects me to bear all the expenditures of International & Domestic travels on my personal credit card and later get it reimbursed. Is it a fair practice, considering my monthly credit card bills may be 3-4 times my monthly take home at times and this could come under tax men's lens?
Usually, it is okay. I have been doing it as well as my colleagues also for last 2-3 years and haven't faced any issues so far. Though my expenses are maximum 50-60% of my take home. Our CA's take on this is that as long as all records of expenditure are produced and you are not a shareholder (in case of Pvt Ltd) of the company, it is fine. Check if one of your colleagues is already following the same method so that you are not the only one if issues come up. Still I would suggest you meet a CA and take a proper consulting on this issue.
Take care.
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Old 15th September 2013, 10:28   #1250
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Default Re: The Credit Card Thread

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Originally Posted by pahwa View Post
I am in a dilemma. My workplace expects me to bear all the expenditures of International & Domestic travels on my personal credit card and later get it reimbursed. Is it a fair practice, considering my monthly credit card bills may be 3-4 times my monthly take home at times and this could come under tax men's lens?
Not a good practice!
As you mentioned, it increases the possibility of coming under scrutiny of the tax man... Even if we have every thing in order, it comes with unwanted visits to the dept.
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Old 15th September 2013, 11:50   #1251
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Default Re: The Credit Card Thread

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Originally Posted by pahwa View Post
I am in a dilemma. My workplace expects me to bear all the expenditures of International & Domestic travels on my personal credit card and later get it reimbursed. Is it a fair practice, considering my monthly credit card bills may be 3-4 times my monthly take home at times and this could come under tax men's lens?
Apart from the taxman's lens problem (which is something you can approach with a clear conscience), this could also put a very severe strain in your personal cash flow situation. You might not have sufficient credit limit to deal with any unexpected personal emergencies or such.

Lastly, if the reimbursements don't come on time you might end up on a very sticky wicket. I was in this situation about 12 years back - due to a delay in the company reimbursement my credit card payment cheque bounced, which lead to the bank refusing a personal loan application, which put my marriage at risk (fortunately the head of accounts had a good relation with the branch manager of the bank, and could put in a word in my favour).

If I were in your position, I would put my foot down - no pay-first-reimburse-later, especially for big amounts. All the major banks now issue pre-paid travel cards which are that much more cost-effective compared to credit cards, when it comes to foreign currency payments. Within India, services like Cleartrip for Business make corporate travel (and stay) generally painless.
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Old 15th September 2013, 16:35   #1252
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Default Re: The Credit Card Thread

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Originally Posted by engrohit View Post
Anyone else received such communiqué?
I too received. 4 transaction each 1000 plus wont be as easy as 250
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Old 15th September 2013, 19:14   #1253
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Originally Posted by binand View Post
Apart from the taxman's lens problem (which is something you can approach with a clear conscience), this could also put a very severe strain in your personal cash flow situation. You might not have sufficient credit limit to deal with any unexpected personal emergencies or such.
That's right. Had not thought about this angle since reimbursements were coming before the credit card bills. I completely agree with you and thank you for the heads up.

Quote:
Originally Posted by amohit View Post
This could be very dangerous in case you get selected for Income tax dept review.

Regards,
Exactly that is what worries me. Will try talking to the travel/account department for a way out.

Quote:
Originally Posted by the_skyliner View Post
Usually, it is okay. I have been doing it as well as my colleagues also for last 2-3 years and haven't faced any issues so far. Though my expenses are maximum 50-60% of my take home. Still I would suggest you meet a CA and take a proper consulting on this issue.
Take care.
Thanks. I really do not have time & bandwidth to meet a CA for these matters. Would rather put my foot down and not pay for any international trips. Seems a bit dicey since I am very new to this workplace.
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Old 16th September 2013, 20:32   #1254
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Default Re: The Credit Card Thread

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Originally Posted by pahwa View Post
I am in a dilemma. My workplace expects me to bear all the expenditures of International & Domestic travels on my personal credit card and later get it reimbursed. Is it a fair practice, considering my monthly credit card bills may be 3-4 times my monthly take home at times and this could come under tax men's lens?
I work for a multi billion dollar company. It is usual experience that company makes you spend especially overseas and ask for reimbursements. Only problem is , during reimbursement they draw out tool of policies showing yeh cover nahin hota.. iska upper cap cross ho gaya !!

Leaving you spending for company.

Best option, go for advance cash and pre paid sort of expenses especially for Cabs, hotels, travel tickets, client lunches.

my 2 cents.
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Old 16th September 2013, 21:28   #1255
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Spending beyond a certain limit will attract the attention of income tax guys. Best way is to ask the company to get a corporate credit card and use the same. This is followed in some companies as this gives the benefit of credit period to the company.
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Old 16th September 2013, 22:13   #1256
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Default Re: The Credit Card Thread

Most companies provide a Corporate Credit Card (usually AMEX), which they insist on being used for all company-related transactions. Also, lots of companies give out travel allowances in the form of prepaid cards and cash (upto a certain limit).

If you have the option, I would suggest you take the company credit card. Reimbursements & pay-off will still be your responsibility, but you won't be jeopardizing your own finances.
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Old 17th September 2013, 09:34   #1257
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Default Re: The Credit Card Thread

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Originally Posted by binand View Post
Apart from the taxman's lens problem (which is something you can approach with a clear conscience)...
I checked with some people - apparently, the taxman can take the view that airline miles, redeemable loyalty points, cashbacks etc. that you receive (as a result of reimbursable expenses on your personal credit card) all fall under the "perquisite" category and are taxable in your hands. I don't think the taxman has made this demand yet, or it has been challenged in the ITAT. Be careful.
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Old 17th September 2013, 09:47   #1258
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Default Re: The Credit Card Thread

One dodge is to get multiple cards. as long as the annual spend on any one card does not cross Rs.200k it will not come under AIR. Also, in any case using one set of cards exclusively for company expenses is a good accounting technique.
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Old 17th September 2013, 10:25   #1259
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Default Re: The Credit Card Thread

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Originally Posted by sgiitk View Post
One dodge is to get multiple cards. as long as the annual spend on any one card does not cross Rs.200k it will not come under AIR. Also, in any case using one set of cards exclusively for company expenses is a good accounting technique.
I doubt if that'll work, as all monthly card balances and payments are reported to CIBIL who then aggregates multiple providers pivoted by your PAN. If the IT department has access to the CIBIL data then they know your total card spend anyway.
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Old 17th September 2013, 15:33   #1260
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Quote:
Originally Posted by sgiitk View Post
One dodge is to get multiple cards. as long as the annual spend on any one card does not cross Rs.200k it will not come under AIR. Also, in any case using one set of cards exclusively for company expenses is a good accounting technique.
This is not how it works for income tax department.
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