Can you pay income tax using a credit card? All you need to know about the charges and payment process
If you have an income tax payment due and are short of immediate cash, using a credit card may seem like a convenient option. The income tax department allows taxpayers to use this mode of payment on the e-filing portal.
You can clear certain income tax liabilities, including advance tax, self-assessment tax and outstanding demand, through the official income tax e-pay facility using authorised payment gateways that support credit card transactions.
The facility is available online and works in a manner similar to other digital payment methods. However, taxpayers should note that paying income tax through credit card is not always cost-free, as convenience or processing charges can be levied over and above the tax amount payable.
How does the e-pay tax facility work?
The e-pay tax service is an online payment system that enables taxpayers to pay direct taxes electronically through the income tax department’s e-filing portal. The facility is available in both pre-login and post-login modes.
Apart from credit cards, taxpayers can also pay their taxes through the payment gateway using several other digital payment modes, including debit cards, net banking and UPI. After selecting the preferred mode of payment, users are redirected to the chosen payment gateway to complete the transaction.
The deadline for filing ITR-1 and ITR-2 is gone, which saw more than 5.9 crore taxpayers filing return ahead of 31 July. The due date for filing ITR-3 and ITR-4 (presumptive taxation scheme), which are meant for businesses and professionals, is on August 31, 2026.
How to clear tax dues using a credit card
If you want to pay your outstanding tax dues by logging into the tax department’s e-filing portal, follow the given steps:
Step 1: After logging into the portal, click e-file > e-pay tax from the dashboard. Make the appropriate selection, then click Continue.
Step 2: On the e-pay tax page, click New Payment to initiate the process.
Step 3: Choose the applicable tax payment tile, select the relevant year, minor head, other required details, then click Continue.
Step 4: Enter the tax breakup by filling in the applicable amounts under the relevant tax heads and click Continue.
Step 5: Select credit card as your preferred mode of payment and complete the payment by following the on-screen instructions. After the transaction is successful, you can download the challan receipt for your records.
Meanwhile, taxpayers who choose the pre-login option can make payments by verifying their PAN or TAN through a one-time password (OTP) sent to their registered mobile number. They can also opt for credit card as their preferred mode of payment and clear the dues.
Things to know before using credit cards to pay taxes
Banks and payment gateways may levy convenience or processing charges for tax payments made via credit cards. It typically ranges between 0.85% to 1.25% of the tax amount, according to a HDFC Bank report.
The amount paid will be treated as a regular credit card transaction that must be repaid within the billing cycle. If the outstanding credit card bill is not cleared on time, interest can significantly increase the overall cost of paying the tax dues.
A common misconception is that interest begins accruing as soon as a tax payment is made. In reality, interest applies only if the full outstanding is not paid by the original due date.
Most credit cards offer an interest-free period of around 45–55 days, which can help individuals manage short-term cash flow without incurring finance charges. Interest is charged only if the outstanding amount is carried forward beyond the due date or if less than the full payment is made.
If the credit card bill is repaid in full within the same billing cycle, taxpayers may be able to benefit from the convenience of digital payment, reward points or cashback offered by the card, and temporary liquidity support without paying any interest on the tax amount paid.
