ITR filing for FY 2023-24: A step-by-step guide to paying income tax using your credit card
Income tax filing: In today’s digital age, using a credit card to pay income tax can provide convenience and can help manage short-term cash flow concerns. Users can also earn rewards for using credit cards which can be redeemed for spends on travel, shopping and gift cards.
July 31 is the due date to file income tax returns (ITR) for FY 2023-24. Filing returns has several benefits. You need to complete the process to claim tax refunds, carry forward losses, secure a visa, and avail of loans, among other things. To enhance convenience in income tax payments, the Government of India launched a new I-T portal on May 20, 2021. Available to citizens for ITR filing and tax payments from June 7, 2021, this portal aims to make it easier for tax-payers to execute their tax-related tasks.
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A significant feature of this I-T portal is the variety of online payment options it supports, including credit cards. Using a credit card to pay your taxes can make the process convenient and bring you several benefits. Mastercard India has compiled the steps for filing returns and paying taxes using a credit card.
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The benefits of using a credit card for tax filing payments include convenience and financial flexibility, allowing you to meet tax obligations even when cash reserves are low, thereby avoiding penalties or interest on late payments. When you pay your taxes with a credit card, you receive immediate confirmation of your payment. This instant acknowledgment ensures that your payment has been received and processed and helps avoid any doubts or delays associated with traditional payment methods.
Further, many credit cards offer reward programmes with points for every rupee spent. So, paying your income tax with a credit card can earn you such reward points, which can then be redeemed for travel, shopping for merchandise, and gift cards. Lastly, making timely payments on your credit card, including those used for tax filing, can positively affect your credit score.
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Here are steps to file your income tax online and make a tax payment using a credit card. First, begin by registering on the I-T e-filing portal at www.incometax.gov.in. If you haven't registered yet, create an account by providing your PAN, personal details, and contact information. Log in using your user ID, password, and the one-time password (OTP) sent to your registered mobile number. Once you log in, locate the 'e-Pay Taxes' option and click on it to start the payment process. On the 'e-Pay Taxes' page, enter your PAN and select the appropriate assessment year. Ensure all details are entered correctly. Also read | ITR filing: Know the changes in income tax return forms for FY24
Then, select a credit card that aligns with your financial goals. Look for cards offering rewards, as this can help offset any platform/payment gateway fees associated with using the card for tax payments. Before proceeding to pay your tax, make sure your card is enabled for online transactions and your tax payment amount is within the credit limit offered by your bank or credit card issuer.
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On the I-T portal, choose a credit card as a payment option to pay taxes. You’ll see multiple bank logos appear on your screen. In case your bank's logo is not listed, select any of the available banks to proceed with the payment. Carefully enter your credit card details, including the card number, CVC, and expiry date. Also read | ITR filing 2023-2024: Here's how to check if your PAN is valid and linked to Aadhaar
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Review and validate your credit card information before finalising the payment. Ensure all details are correct before proceeding to make a tax payment. Once your payment is confirmed, a tax payment receipt will be generated. Save and print this document for future reference. Additionally, monitor your credit card statement for the tax payment.
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Understand the fees associated with using your credit card for tax payments. These may include convenience fees charged by the payment processor or your card issuer. Compare these fees with potential rewards to determine how using your credit card is financially beneficial.
In today’s digital age, using a credit card to pay income tax can provide convenience and can help manage short-term cash flow concerns. However, it’s important to be aware of your credit card’s terms and conditions before opting for this payment method. With thorough planning and wise financial decisions, you can handle your tax obligations with ease.
Hiral Thanawala is a personal finance journalist with over 10 years of reporting experience. Based in Mumbai, he covers financial planning, banking and fintech segments from personal finance team for Moneycontrol.
