Credit Card Rules:  These 5 New Rules Will Impact Credit Cards, Effective April 1st

Credit Card Rules: If you use a credit card, this news may be very important for you. Significant changes are afoot for credit card users starting April 1st, 2026. The Income Tax Department has released new draft Income Tax Rules 2026, which, upon approval, will come into effect and replace the old 1962 rules. These rules aim to increase transparency in digital transactions and prevent tax evasion. While these rules are currently in the draft stage, if finalized, those making large expenditures using credit cards will need to exercise caution.

These changes will be made to the credit card rules

• The first change is that digital expenditures of ₹10 lakh or more in a financial year can now be reported to the Income Tax Department. The bank or card company will report such large transactions to the department. Cash expenditures of ₹1 lakh or more can also be reported. This will help monitor major expenses and ensure compliance with tax regulations.
• The second change is that credit card statements can now be used as proof of address. Statements containing details from the last three months will be valid and can be submitted as proof of address when applying for a PAN. The only requirement is that the address on the statement must be correct and updated.
• The third change allows income tax payments using credit cards. Previously, only net banking, debit cards, or other digital means were available. However, this facility may incur bank processing fees or interest, so be sure to understand the additional costs before using it.
• The fourth change is that if a company issues a credit card to an employee, personal expenses may be considered perquisites and subject to tax. However, office-related expenses, such as business trips, meetings, or client entertainment, will not be taxable. The company will be required to maintain records of all expenses and prove that the expenses were incurred solely for official purposes.
• The fifth change is that a PAN will now be mandatory for obtaining a credit card. Applications without a PAN will not be accepted. This is intended to track large transactions and prevent fraudulent spending.