Paying Income Tax via Credit Card in 2025: What You Need to Know

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Credit cards offer a convenient way to make payments, so why not use them for income tax payments? While paying taxes with a credit card can earn rewards, it also comes with fees. Here’s a detailed look at how it works and whether it’s the right choice for you.

Paying Income Tax with a Credit Card

Previously, taxpayers could only pay income tax through net banking of select commercial banks. Now, payment options have expanded to include NEFT, RTGS, UPI, and credit cards. However, using a credit card attracts processing fees.

How to Pay Income Tax via Credit Card

  1. Visit the official Income Tax India portal and click on the e-Pay option under Quick Links.
  2. Enter your PAN card details and contact information. Verify with the OTP received.
  3. Select “Advance Tax” and proceed.
  4. Choose the assessment year and type of payment.
  5. Enter the tax amount, including any surcharge, cess, interest, or penalty.
  6. Select “Payment Gateway” to proceed with a credit card. Fees depend on the gateway used.
  7. Review the payment details and confirm.
  8. Enter credit card details and complete the transaction with OTP authentication.

Fees and Charges for Income Tax Payment via Credit Card

Different banks charge different fees for processing tax payments via credit cards.

Federal Bank

  • Credit card (Federal Bank): 0.85%
  • Credit card (Other Banks): 0.85%

Kotak Mahindra Bank

  • Credit cards (Master/Visa/RuPay/Diners): 0.78%

Canara Bank

  • Credit card (Canara Bank): 0.90%
  • Credit card (Other Banks): 0.90%

HDFC Bank

  • Credit card (HDFC Bank): 0.72%
  • Credit card (Other Banks): 0.80%

SBI Bank

  • Credit card payments not accepted

Bank of Maharashtra

  • Credit card (Above Rs 2000): 1.00%
  • Credit card EMI (Master/Visa/RuPay): 1.00%

An additional 18% GST applies to all these charges.

Best Credit Cards for Income Tax Payment

For those looking to maximize rewards on tax payments, these cards offer benefits:

Should You Pay Income Tax via Credit Card?

  1. Reward Benefits: Use a credit card only if it offers reward points, preferably with an effective rate above 2%, to offset the transaction fee.
  2. Milestone Spends: If the payment helps you reach a milestone spend and unlock benefits, it could be worth considering.
  3. Transaction Charges: Processing fees range from 0.72% to 1.00%, plus GST, making it crucial to assess the net benefit.
  4. Interest Charges: If the card balance is not paid on time, high interest rates can outweigh the advantages.

Final Thoughts

Paying income tax via credit card can be beneficial if you earn rewards or meet spending milestones. However, the fees and potential interest charges should be carefully evaluated before proceeding.