The government is preparing to introduce major changes to credit card reporting under the proposed Income Tax Rules, 2026. Once implemented, high-value credit card transactions will be reflected in an individual’s PAN record, strengthening financial tracking and tax compliance. The new provisions are expected to come into effect from April 1, 2026, after the consultation process is completed.
Mandatory reporting of high-value payments
Under the draft rules, if a person pays more than ₹10 lakh in credit card bills in a financial year through non-cash modes, banks and card issuers will be required to report the details to the Income Tax Department. In addition, cash payments of ₹1 lakh or more towards credit card dues will also have to be reported.
The move is aimed at monitoring high-value spending and curbing tax evasion by creating a clearer audit trail of financial behaviour.
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PAN to be compulsory for getting a credit card
The proposal also makes it mandatory to furnish a PAN while applying for a credit card. This will enable direct linkage of card spending with tax records and allow authorities to track large or suspicious expenditures more effectively.
Credit card statement as valid address proof for PAN
In a taxpayer-friendly change, the last three months’ credit card statement will be accepted as a valid address proof while applying for a PAN card. This is expected to help applicants who do not have immediate access to traditional address documents.
Credit cards to be allowed for tax payments
The government is also planning to permit the use of credit cards for online tax payments. Currently, tax payments are largely restricted to debit cards, net banking and other digital methods.
Tax treatment of company-issued credit cards
If an employer provides a corporate credit card and reimburses expenses such as annual fees or membership charges, the reimbursed amount may be treated as a taxable perquisite in the hands of the employee, depending on the nature of the expenditure.
Push for transparency and compliance
Experts believe that linking credit card transactions with PAN will improve transparency, help detect undisclosed income and strengthen data-driven tax scrutiny. It will also bring high-spending individuals into the reporting framework without increasing compliance burden for ordinary users.
The draft rules are currently open for stakeholder feedback. The final notification will determine the exact implementation timeline, but the direction is clear: high-value spending will face tighter reporting and closer tax oversight in the coming financial year.
About the author – Ayesha Aayat is a law student and contributor covering cybercrime, online frauds, and digital safety concerns. Her writing aims to raise awareness about evolving cyber threats and legal responses.
