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A credit card can help you pay certain income tax dues when you cannot immediately make the payment from your bank account.
The e-pay tax facility allows payments such as advance tax, self-assessment tax and outstanding tax demands. Credit cards, debit cards, net banking and UPI are accepted.
You can log into the Income Tax e-filing portal, select the relevant tax category, enter payment details and complete the transaction through an authorised payment gateway.
The portal also allows pre-login payments. After verifying your PAN or TAN with an OTP sent to your registered mobile number, you can complete the payment.
The tax amount stays the same, but banks and payment gateways may charge a convenience fee. This usually ranges between 0.85 per cent and 1.25 per cent.
After a successful transaction, the tax payment is added to your monthly credit card statement. Most credit cards offer an interest-free period of around 45-55 days.
If you pay the entire outstanding amount by the due date, no interest is charged. Otherwise, interest can make the tax payment more expensive.