Pay Income Tax Online through Credit Card (India)

By | December 14, 2022
Pay Income Tax through Credit Card in India

The ability to pay income tax online through credit card is great to have and we got this option in India since past few months. I just made a tax payment through credit card and it was a super smooth process, thanks to IT authorities for making this possible.

Here’s everything you need to know about making income tax payments (advance tax, TDS, etc) through income tax eFiling portal.

Steps to Pay using Credit Card

  1. Visit IncomeTax eFiling Portal
  2. Navigate to “e-Pay Tax” section on the left
  3. Enter your PAN/TAN details & authenticate mobile # via OTP
  4. Choose type of tax, then choose FY/AY & other details
  5. Choose “Payment Gateway” & make payment

Note: Choose the payment gateway based on the txn charges. You may find the respective gateway charges by clicking on the “transaction charges” link.

Here are the snaps of key pages for your guidance:

Income Tax eFiling Portal (Home Page)
Income Tax eFiling Portal (Home Page)
Income Tax eFiling Portal - Choose Payment Gateway
Income Tax eFiling Portal – Choose Payment Gateway

Transaction Charges

  • Credit Cards: As low as 0.47% + GST (Canara Bank)
  • Debit Card: 0% (mostly)

Note that the transaction charges are different for different payment gateways and that the charges are dynamic and keep changing from time to time.

As of today (14 Dec 2022), Canara Bank payment gateway has the lowest transaction fee. Do verify the same before choosing the payment gateway and re-confirm the fee on the next step.

Here are the current charges as of Dec 2022 that I see on the portal.

Transaction Charges - Canara Bank Payment Gateway
Transaction Charges – Canara Bank Payment Gateway
Transaction Charges - Kotak Bank Payment Gateway
Transaction Charges – Kotak Bank Payment Gateway
Transaction Charges - Federal Bank Payment Gateway
Transaction Charges – Federal Bank Payment Gateway

Why Pay via Credit Cards?

Paying taxes through credit cards does attract a small transaction fee. So if you’re new to credit cards and ask me “Why pay fee?” Here are some of the reasons,

1. Annual Fee Waiver: If you’re holding Premium credit cards, it comes with an annual fee waiver condition based on spends of “X Lakhs” in a card anniversary year. These tax payments can get you closer to it.

2. Rewards: While most Credit Cards may not give reward points for government transactions, you may just use it to avail at-least the milestone benefits.

For ex, a tax payment of 1.2L INR on Axis Vistara Infinite Card will not only get you a free card but also a free business class ticket + 10K Points equivalant to another 2 economy tickets. That’s 3 flights for Free!

If you do not have credit cards with milestone benefit, all you need to do is to make sure your credit card regular reward rate % is more than the txn fee % that you’re being charged.

If you’re looking for credit cards with high reward rate, do check the list of best credit cards in India at the moment.

3. Additional Credit Period: You can easily get 30+ days to pay back your credit card bill, so it’s an added advantage just incase if you’re in a cash crunch. If you’re paying EMI/interest for loans, consider it as a cheapest loan for a month.

If you still feel that you don’t wish to pay the transaction fee, you may also choose to pay with debit cards at 0% fee. While you may or may not get rewards, this will help to keep the debit cards active.

My Experience

The user experience was ultra smooth while making advance tax payment on the Income tax eFiling portal.

I’ve used Axis Magnus Credit Card this time to get closer to current month’s milestone benefit. You may as well use any card that gives decent milestone benefits.

Note: Use HDFC Credit Cards before 31st Dec 2022 to enjoy the rewards, as the HDFC reward structure changes kicks in from 1st Jan 2023.

Final Thoughts

It’s great to see that the government has not only taken steps to include credit card as a payment option for making online tax payments but also implemented it pretty well.

This is a great option for the citizens of India but appears to be not so great for banks, as both Axis Bank (eff. 15 Nov) & HDFC Bank (eff. 1st Jan) recently notified it’s customers that they will no longer give rewards for the government transactions.

That said, it’s still beneficial in many ways as mentioned before. Finally we’ve a reason to pay taxes on time. 🙂

Have you paid taxes using your credit card? Feel free to share your thoughts in the comments below.

Author: Siddharth

Helping Indians to choose right credit cards, pick right offers and enjoy luxury vacations for less. Day & night exploring the spiritual reality of our human existence.

39 thoughts on “Pay Income Tax Online through Credit Card (India)

  1. Tejas

    Thanks. I have been waiting for this article.
    Which all cards are good (considering milestone and rewards) for government transactions?

    Reply
  2. SHASHI BHUSHAN KUNDA

    I paid 50k as advance tax through my amazon pay credit card on 7th december. This is the best way to reach milestones through credit cards especially for people paying in lakhs in taxes in 30% slab like me.

    I paid through canara bank gateway which means I get 0.53% as cashback which is unheard of in probably tax paying history. Amazon pay is probably some of few credit cards which will give you cashback for govt payments till now. Have to see which credit cards are going to stop in future. I have diners club privelege, sc ultimate, eterna . Will be trying these in next few months for more cashback.

    Reply
  3. Sharad Nayak

    I knew about this facility and had made by Sep and Dec advance tax payments via my Infinia card. Did not pass the word around as I feared that the HDFC Bank would make them ineligible for reward points if they say increased usage of this facility by clients. Nevertheless, this now comes into effect from 01.01.23. Hence I would commend you for releasing this article at just about the right time given that tomorrow is the deadline for advance tax payments.

    Reply
  4. PK

    HDFC Diners black card doesnt work on this. Just tried it.
    Axis Magnus gives reward points or doesnt?

    Reply
  5. Gkcards

    You mentioned Axis wont give rewards from 15th Dec for govt transactions, is it true for Magnus also

    Reply
    1. Siddharth Post author

      Magnus still getting rewards (from what I hear) for these txns but it seems more of a soft rule. May change anytime.

      Reply
      1. PK

        As a follow up to this, I paid with my Magnus for income tax on 14th. Now the points are showing updated till the 15th and I have not been given edge rewards for the income tax paid. Can anyone confirm if they have been given edge rewards?

        Reply
      2. Pk

        After speaking to customer care, the points on Magnus were credited pretty much instantaneously for advance tax payment.

        Reply
  6. Abhi

    Was waiting for this article as this was announced way back but wasn’t live. Only issue is many cards exclude govt payments and taxes from rewards. Maybe readers can contribute with list and details of cards best suited for this category.

    Reply
  7. Karan

    Great . Now thanks to your post everyone is gonna do this , making it unviable to banks and all remaining banks will go HDFC way and disable points accrual on govt spends.

    Reply
    1. Rahul

      In this age, it is not going to be hidden. Someone or the other will post it..
      SBI, BOB, Axis and HDFC implemented no points or lower points on govt spends since nov itself even befor Sid’s article. Because in September lot many people paid taxes using credit card (including myself).

      Govt spends were curtailed far faster than rentals despite more people paying rent!! Thats the surprising bit

      Reply
  8. Dillip Kumar Sahoo

    Hi Siddharth, r u saying axis Bank will not give rewards for tax payment for all axis Bank credit card from 15th nov onwards? I am asking this bcz i paid advance tax using axis Ace card on 30th Nov. I got 2% cashback confirmation sms after the transaction.

    Reply
  9. Anujay Singh

    Hey Siddharth,

    Did Axis Bank remove points on Government transactions on all credit cards? I had a look at their PDF and there is no mention of Magnus or Reserve.

    Also, looking at miles transfer considering United miles as 0.8 INR, doing tickets through which card is more favourable? Infinia, Magnus or Reserve? I would probably not do transfers on Infinia though.

    Reply
  10. Ramesh Shah

    Hi Sid,

    Thanks for timely article. Will i get regular reward points on Infinia if I pay on 15th Dec?

    Reply
  11. Raman

    Thanks Sid, great article.

    Is Magnus giving regular edge rewards on NPS payment?

    Reply
    1. Siddharth Post author

      Magnus is untouched on any type of spend as far as I know (i’ve not tested NPS), but we can expect anything to happen any day!

      Reply
  12. Satish Kumar Agarwal

    Kotak cards were levying NIL charges 2 months back AFAIK.

    Currently Canara bank gateway is best. Used that to pay Advance tax last month @0.47%+ GST.

    Timely article and a nice one at that 👍

    Reply
  13. Binu Jose

    Does contribution to NPS Tier 1 Constitue as a govt transaction…If possible write an article on the changes of reward payment of HDFC Diners Black… Rent pymt…etc

    Reply
  14. Shankar

    Axis Flipkart gives 1.5% cashback , this is better than Amazon Pay 1%, but not sure if works for IT payment…, if anyone tried, please share the experience.

    Reply
  15. DB

    Hi Sid

    Are Amex cards accepted?
    I have a 5% spend based offer and this will certainly be beneficial even if they don’t accrue points on the spend.

    Reply
  16. Suneha

    How do you guys pay tax via credit card? Does your company not deduct tax from your salary before it credits in your bank account?

    Reply
    1. Saurabh

      Many people have to pay taxes by their own either because they are self employed (non – salaried and/or involved in a business ) or they have additional income other than their salary.

      Reply
    2. Rahul

      For self employed.

      For salaried – it is mainly interest, dividends, capital gains and other income which are not reported in salary but are taxable

      Reply
  17. varun

    Will Axis vistara infinite give CV points for tax payment and will it be considered for 1.2 lacs fee waiver criteria. Pls confirm.

    Reply
  18. Saurabh

    Axis Ace & Flipkart cards are providing regular cashback, i.e. 2 & 1.5 % respectively.
    Just tried now & received SMS for eligible of cashback.

    Reply
    1. raone

      I paid using Canara Gateway Rs. 65000 (axis vistara infinite) and it charged less than Rs.400
      I will get 1900 Vistara points which equals = 1950 – which equals 1500 Rs
      and I paid 400, so net profit = 1100 + meeting the credit card milestones.

      Reply
  19. manas

    Axis vistara infinite looks best for this? If I have tax payment for 30 lakhs?

    Reply

Leave a Reply

Your email address will not be published.