Coming soon: UPI, mobile wallets, credit cards for paying taxes
Paying your income-tax (I-T) may soon become as easy as swiping a card at a shop or a restaurant. The government is planning to extend the electronic modes of tax payment to its own payments platform, Unified Payments Interface (UPI), credit cards of banks, or even a mobile wallet like Paytm.
In line with the Digital India initiative, the move is aimed at improving compliance by simplifying the process of e-payment of taxes, which has, so far, been limited to only netbanking and the debit cards of a handful of banks.
Confirming the development, Revenue Secretary Ajay Bhushan Pandey told Business Standard that UPI as a mode of tax payment would be introduced as soon as possible. “We are working on this. Today you can pay only through netbanking and debit cards. We would definitely like to use UPI. This may be allowed as soon as possible,” he said.
“The idea is to give more electronic payment options for tax payment. If it is a small tax amount, it may be convenient for people to even use a mobile wallet,” said a government official. “We are going to define ‘electronic payments’, which could be a wallet, a credit card or UPI,” he added. UPI is an instant, realtime payment instrument developed by the National Payments Corporation of India. It works by instantly transferring funds between two bank accounts on a mobile platform.
India also has a handful of mobile wallet services, including Paytm, Amazon Pay, Olamoney, among others. At present, one can pay tax using the debit cards of only six banks — State Bank of India, HDFC Bank, Canara Bank, ICICI Bank, Indian Bank, and Punjab National Bank.
Some developed countries such as the UK and Canada allow the payment of taxes via credit cards. Canada also allows the use of mobile wallets like Paypal.
Archit Gupta, founder and chief executive officer, Cleartax, said that adding more channels of tax payment would give taxpayers more options to choose from and make their payments quickly and easily. “It is important that these methods function smoothly, so that taxpayers are able