Is it Worth Paying Your Tax Using a Credit Card
Paying income tax with a Credit Card is considered an effective method to discourage cash transactions, which is one of the main reasons why people avoid paying taxes. It also helps avoid instances of counterfeit currency. Read on further to know whether it is worth paying tax using a Credit Card.
The Government of India allows payment of income tax through Credit Cards. It is an attempt to discourage the flow of black money and encourage non-cash transactions in the country. It is much simpler to pay income tax using a Credit Card, as it is quick and convenient. in fact, you can avail a host of tax benefits using this payment method. Paying income tax with a Credit Card boosts the speed of the transaction. As our country still has to deal with instances of counterfeit currency, tax payment through a Credit Card is the Government’s attempt to reduce such illegal situations.
Tax benefits on Paying Income Tax through a Credit Card
- If you are paying income tax through a Credit Card, this will allow you to file a challan online and get an instant fund transfer acknowledgement
- The online challan can be produced and downloaded anytime for future references
- VAT reduction ranging from 1% to 2% is granted to Credit Card holders on cashless transactions
- You are also allowed to remit taxes from a company, at any time of the day
- If you pay your tax using a Credit Card, you can avail fuel services without incurring any transaction charges
- The Government of India also agrees to offer rebate in case of 50% transactions made through the cashless modes
- To encourage payment using Credit Cards, the Government has also reduced the Merchant Discount Rate (MDR) fee that is charged by banks for paying through a Credit or Debit Card.
- For payment of income tax online, the Government has launched an integrated payment gateway called ‘PayGov India’. This includes the option of paying taxes through a Credit Card.
How to pay tax using a Credit Card?
- Login to the NDSL-TIN website
- You will be asked to select the Challan Application Number
- You will need to provide your PAN and TAN, which will be verified online
- Once the authentication is complete, fill up the challan details, such as, the bank through which the payment is being made, the accounting head under which the payment is being made, name and address of the TAN/PAN, etc.
- Once you submit the data, a confirmation screen will appear. Upon confirmation of the details, you will be redirected to the bank’s Internet Banking platform
- Once you log in to Internet Banking, you can pay your taxes
- After successful payment, a challan counterfoil will appear containing the Challan Identification Number (CIN), the transaction amount and the bank through which the payment was made. The challan counterfoil works as proof of tax payment.
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