Key takeaways
- The income tax portal accepts credit cards through bank payment gateways, which charge about 0.72–0.85% plus 18% GST.
- Many cards exclude government and tax payments from rewards, including ICICI cards.
- It's worth it only if your card's effective reward rate on tax is clearly above about 1%, or you need the credit period.
- GST payments by card are available through the GST portal's payment options, with similar gateway fees.
Advance tax, self-assessment tax and GST can be large payments. Paying them by credit card gives you up to 50 days of interest-free credit and, on the right card, rewards. But gateway fees and reward exclusions mean it's often a loss. Here's how to decide.
How to pay income tax by credit card
- Log in to the Income Tax e-filing portal and go to e-Pay Tax.
- Create a challan: choose the assessment year and tax type (advance tax, self-assessment tax, etc.).
- Choose "Payment Gateway" as the payment mode and pick a bank's gateway.
- Pay by credit card. The gateway fee is shown before you confirm.
- Download the challan receipt for your records.
What the gateways charge
| Gateway bank | Credit card charge (before GST) |
|---|---|
| HDFC Bank | About 0.72% (HDFC cards) to 0.80% (other banks' cards) |
| ICICI Bank | About 0.78–0.85%, depending on card type |
| Kotak Mahindra Bank | About 0.80% |
| Federal Bank | About 0.85% |
18% GST applies on the charge, so 0.85% becomes about 1.003%. Charges change, so check the amount shown at checkout.
Do you get rewards on tax payments?
Often, no. Many banks list "government transactions" or "tax payments" as excluded from rewards. ICICI Bank, for example, gives no rewards on government transactions. Some premium and business cards do reward tax payments; check your card's current exclusion list before paying.
The maths
Say you pay ₹2,00,000 of advance tax through a gateway charging 0.80% + GST:
- Fee: ₹1,600 + ₹288 GST = ₹1,888.
- On a card that excludes tax: rewards ₹0. Net cost ₹1,888.
- On a card rewarding tax at 2%: rewards ₹4,000. Net gain about ₹2,112.
- If the payment helps you cross a milestone or fee waiver (and tax counts toward it), the value can be higher.
Rule of thumb: pay tax by card only if your card's effective reward rate on tax is at least about 2%, or you genuinely need the credit period.
Paying GST by credit card
Businesses can pay GST through the GST portal's e-payment options, which include card payments through authorised banks' gateways. Gateway fees are similar to income tax payments. For businesses, business credit cards are often the best option, as some offer rewards on GST and tax payments and extend the payment cycle. The GST itself is paid from the electronic cash ledger once the payment is credited.
Using the credit period well
Paying a large tax bill by card near the start of your billing cycle can give you up to about 50 days before the card bill is due. That can help cash flow for self-employed people and businesses with uneven income. But only if you can pay the full card bill on time. Card interest of 36–45% a year makes carrying a tax payment on your card very expensive.
Business cards for tax and GST
Businesses and professionals paying GST and advance tax regularly should look at business credit cards. Some, such as HDFC's business cards, promote rewards and extended credit on tax and GST payments. Compare the reward rate on government payments, any monthly caps, and the gateway fee. Because the payment amounts are large, even a 1% difference in the effective rate matters.
Advance tax deadlines
Advance tax is due in instalments on 15 June, 15 September, 15 December and 15 March. Paying by card a few days before a deadline gives you the credit period without risking interest under the Income Tax Act for late payment. Avoid the last day, when gateways can be slow.
Keep records
Save the challan receipt (with the CIN or challan identification number) for every tax payment, and your card statement showing the payment and the gateway fee. The gateway fee is a cost for businesses; talk to your accountant about how it's treated. For individuals, the challan is what proves your tax payment.
Watch out for
- Credit limit. A big payment may need a temporary limit increase. Ask your bank beforehand. See how to increase your limit.
- Failed payments. If money is debited but the challan isn't generated, keep the transaction reference. Most failures reverse automatically.
- Utilisation spike. A large payment can temporarily raise your credit utilisation. Pay it off before the statement date if your score matters right now.
Other payments with special rules: rent, school fees and insurance, and hidden charges.
FAQs
Can I pay income tax with a credit card?
Yes. Choose Payment Gateway on the Income Tax e-filing portal's e-Pay Tax service and pay by card through a bank's gateway.
What is the charge for paying income tax by credit card?
About 0.72–0.85% of the amount depending on the gateway bank, plus 18% GST on that charge.
Do I get reward points on tax payments?
Often not. Many cards exclude government and tax payments. Some premium and business cards reward them.
Can GST be paid by credit card?
Yes, through the GST portal's e-payment options that support cards via authorised bank gateways, with similar fees.
Sources
- CardInsider: paying income tax by credit card (gateway charges)
- HDFC Bank: income tax and GST payments using business credit cards
- Zee News: ICICI no rewards on government transactions
