Avoid bank card for paying tax if in case you have a alternative

The Central Board of Direct Taxes (CBDT) will launch a brand new e-filing portal on 7 June. The new web site has many options that make it simpler for taxpayers to file their returns.

One of the issues that stands out is the addition of fee choices. Taxpayers will be capable to pay tax through netbanking, UPI (Unified Payments Interface), RTGS (Real-Time Gross Settlement), NEFT (National Electronic Funds Transfer) and even bank cards.

Until now, taxpayers had the choice to pay solely through netbanking of huge non-public and public sector banks. Most non-public sector, international and cooperative banks will not be a part of it. Increasing the choices will make it simpler for taxpayers.

“For many taxpayers, it was tough to make fee on-line as their banks weren’t a part of the I-T division’s system. Some purchasers even checked if they’ll switch the cash to us and whether or not we are able to pay on their behalf. More fee choices, particularly bank cards, will make it handy to pay tax,” mentioned Gautam Nayak, associate, CNK & Associates LLP.

If you intend to make use of a bank card, make sure that you repay on time. Don’t use a bank card to borrow since you don’t have ample cash to pay the tax by the deadline. Revolving bank card excellent is dearer than delaying tax fee.

“You need to pay a 1% penalty on the tax due when you miss the advance tax fee and one other 1% when you miss the deadline for submitting earnings tax. Usually, taxpayers can nonetheless file belated returns till 31 December. This yr, the deadline for late returns has been prolonged by a month. If somebody revolves bank card excellent, the curiosity prices can be far greater,” mentioned Arvind Rao, a chartered accountant and a licensed monetary planner.

The finance prices or the annual share price on bank cards are usually upwards of three% a month. In some circumstances, it might probably even be as excessive as 4%. While the federal government prices easy curiosity on the tax due, bank card issuers cost curiosity on curiosity.

Suppose you pay ₹50,000 as tax utilizing a bank card and might repay ₹25,000 every month, you’ll find yourself paying ₹2,364 in finance value over three months. GST can be charged on the curiosity as properly.

The authorities, however, prices easy curiosity on the excellent quantity. If you might have delayed paying ₹50,000 for 3 months, and there’s a 1% penalty every month, you’ll find yourself paying ₹1,500.

So, use your bank card to pay tax provided that you possibly can repay the issuer earlier than the due date.

Subscribe to Mint Newsletters * Enter a legitimate e mail * Thank you for subscribing to our publication.

Never miss a narrative! Stay linked and knowledgeable with Mint.
Download
our App Now!!