In order to support the wave of digital India and to further curb the flow of black money, the government has offered tax benefits for individuals who would like to make payment by card for filing their income tax returns. It is considered that this mode of payment will make the process of accounting much easier and simpler and will also increase the processing speed of the transactions made through thecard. This will also build transaction history of an individual which will improve the credit access of an individual and will include the individual in the system. The non-cash transaction will also discourage the avoiding of tax among the individuals at the same time reducing the flow of counterfeit currency.
Tax Benefits for Income Tax Payment Through Credit Card
- Making payment of income tax through credit card will enable the user to file a challan online and will also provide an immediate acknowledgment of the remittance.
- A receipt will be produced in form of challan which will bear the Corporate Identity Number (CIN) that will be downloaded and printed for record and reference purposes.
- The individuals will be able to remit taxes on behalf of the company, firm and others from a computer at any point in time.
- The transaction charges charged at the petrol pumps, gas agencies, railway tickets etc. will be removed.
- The individuals will receive arebate on tax, if they use their credit card or debit card to pay their utility bills.
- The Merchant Discount Rate (MDR) is the fee charged by the banks to the merchants for accepting payments through the credit or debit cards. The government has proposed a reduction in the MDR in order to encourage cashless transactions.
- The government will be providing atax rebate to the merchants that have done atleast 50% cashless transactions.
- Around 1% to 2% reduction in theVAT will be given to merchants on cashless transactions.
- The interchange fee on credit or debit card will be standardized across the country for a better adaptability.
- The PayGov India payment gateway will be the largest integrated payment gateway in the country in order to make a variety of payment which would include paying income tax through credit cards. This system will simplify the process of paying income tax.
- The payment of income tax through credit card will benefit both the taxpayer and the government to get an accurate record and history of payments made.
Steps for Payment of Income Tax Through Credit Card
- Step 1: Login to the NSDL-TIN website.
- Step 2: The individual will have to select the challan applicable to him i.e. ITNS 280, ITNS 281, ITNS 282 or ITNS 283.
- Step 3: The taxpayer will have to enter the PAN or TAN as applicable. The PAN or TAN number entered by the taxpayer will be verified online.
- Step 4: Once the PAN or TAN is verified and authenticated the taxpayer will be allowed to fill the challan details such as the name and address of PAN or TAN, the bank through which the payment will be made, the accounting head under which the payment will be done, etc.
- Step 5: Once the data has been submitted successfully the confirmation screen will appear. Once the taxpayer confirms the date, he will be re-directed to the net-banking website of the bank.
- Step 6: The taxpayer will be required to login to the net-banking site with his or her user id and password and then enter the details of the transactions.
- Step 7: After you have made the payment successfully the payment challan counterfoil will appear containing the CIN, the bank through which the payment was made, and the transaction amount. The challan counterfoil will work as a proof of tax payment.
Steps to File Service Tax
As on 1st January, 2014, assesses who wish to pay more than Rs.1 lakh in service tax for the previous financial year will have to the payment online. Enlisted below is a step-wise procedure to make payment of service tax online through credit card:
- Step 1: Login to the NSDL-TIN website.
- Step 2: Select option for making e-payment
- Step 3: Fill in the 15 digit Service Tax Registration number as provided by the Income Tax Department.
- Step 4: A Captcha code will be prompted on the NSDL website, the taxpayer will be required to fill this.
- Step 5: An online verification of the details will take place, and once the online verification of details is authenticated they will be stored in assesses code master and will appear on the screen.
- Step 6: The taxpayer will be able to select the accounting codes for which the tax is being filed and for which service the tax is being paid.
- Step 7: The education cess will be applicable and will need to be selected.
- Step 8: After submission of the details mentioned above the taxpayer will have to select the bank of choice in order to make the payment.
- Step 9: Once the taxpayer has selected the bank he will be redirected to the bank’s net-banking portal for the purpose of entering the login details.
- Step 10: Once you have filled the amount for making the payment of service tax after making the payment, a page will appear on the screen showing the confirmation receipt and a Challan Identification Number for the future reference. This CIN can be used to track the Service Tax payment.