Taxability of the Credit Card Expenses: H&R Block
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H&R Block – Claiming credit card expenses for official purpose


Use of credit cards is now very common with businesses for it provides ease in accounting. Employees get credit cards to meet expenses, which may be incurred for official or personal purpose. Taxability of the credit card expenses depends upon nature of these expenses.  In this article we will explain taxability of credit card expenses. It will offer insights to employees who claim credit card expenses from their employers.
Generally, companies give credit cards to employees to meet official expenses. If an employer has given credit card to meet his personal expenses then such expenses are taxable. These expenses are calculated as perquisites and are considered in employee’s income.

To calculate perquisites in respect of credit card from taxation perspective, follow these simple steps:-

Step 1: Calculate total expenditure incurred on the credit card

Step 2: Less – Expenditure done for official purpose

Less – If any amount recovered from the employee.

Step 3: Balance amount will be taxable as perquisite.

Following documentary proof must be available with the employee to claim the amount used for official purpose:

  1. Complete details of the expenditure should be maintained i.e. date of expenditure, nature of expenditure etc. Supporting documents like bill / receipt should be maintained.
  2. The employer should give a certificate that the claimed expenditure is incurred for official purpose.

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H&R Block India
H&R Block India is the subsidiary of the world's leading tax filing company, H&R Block, US. In India we provide online and personalised tax filing services for individuals, professionals and businesses. We also provide managed services for GST.

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