2 days ago

Indian Tax Rules for Cashback, Referral Bonuses, and Old Phones

Do you pay tax on credit card cashback, referral bonus or old phone sale? Explained · livemint.com

Credit card cashback is usually treated like a discount on something you bought.

Reward points and air miles are generally treated the same way.

These benefits usually do not need to be reported as income in your tax return.

However, they may be treated differently if they are not connected to spending or are received through a business or job.

A referral bonus is different because it is payment for referring someone to an app.

If you receive such money occasionally, it is generally taxed as income from other sources.

Selling your own used phone is generally not taxable because it is a personal item.

The same treatment can apply to other everyday belongings such as clothes, furniture and laptops.

Key facts

Credit card cashback: Generally treated as a discount or rebate linked to spending, rather than taxable income.
Reward points and air miles: Generally not taxable when connected to credit card spending.
Possible reward taxation: Rewards may be taxable if unrelated to spending, monetised, or connected to business or employment.
Referral bonus: An occasional fintech referral reward is generally taxable under “Income from Other Sources”.
Relevant provision: Section 56 of the Income-tax Act covers income not falling under specified other heads.
Personal mobile sale: Selling a personally used mobile phone is generally exempt as a sale of a personal effect.
Other personal effects: Clothing, furniture, crockery, utensils and daily-use electronics are listed as generally exempt personal items.

livemint.com · 2 days ago