India’s digitization drive is set to grow its digital economy six-fold by 2030, with the new income tax e-filing portal enhancing convenience and security, particularly through credit card payments.
India’s digitization and growth journey has been making headlines globally, with reports suggesting that the country’s digital economy will grow six-fold to reach USD 1 trillion by the end of this decade. What’s remarkable about this journey is that it has been highly inclusive, covering all sectors of the economy and all sections of society. From farmers and labourers in small towns and villages to doctors and engineers in big cities, Indians are increasingly leveraging digital platforms and tools to enhance their ease of living, working, and more.
Anticipating people’s growing shift towards ‘digital’, the Central Board of Direct Taxes (CBDT) launched a new income tax e-filing portal in June 2021. The new portal was designed to make tax filing and other tax-related tasks quicker, simpler, and more convenient. It came with a bouquet of user-friendly features, such as income tax return (ITR) processing, free ITR preparation software, single dashboard interaction, call centre services, among others.
The launch of the new portal was quite significant also because it encouraged taxpayers to use digital payments to file tax returns and gave them multiple options to choose from. These options include the use of credit cards for filing ITRs.
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Safety and convenience
Transaction security is often a key concern for consumers while filing tax returns. Credit cards can address this concern as they offer a high level of security for online payments, including fraud detection and prevention mechanisms.
Further, payments made through credit cards use secure card tokens (replacing a cardholder’s actual card details with a unique, randomly generated identifier), ensuring that the person’s financial information is encrypted and protected from cybercriminals. Many credit card issuers offer real-time alerts for transactions which allows cardholders to closely monitor their account and immediately detect any suspicious activity.
Using a credit card for tax payment can also be incredibly convenient, enabling the cardholder to quickly pay taxes anytime, anywhere. Credit card payments provide instant transaction confirmation, ensuring peace of mind for the cardholder. Additionally, credit card statements serve as an excellent record of tax payments, simplifying financial documentation and making it easier to keep a track of expenses.
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Financial health and other benefits
Credit cards generally come with a grace period for payments which provides cardholders additional time to manage their cash flows effectively without incurring immediate out-of-pocket expenses. Further, timely payments through credit cards can positively impact the cardholder’s credit score which can boost creditworthiness and prove beneficial for the overall financial health.
Further, cardholders also get the chance to earn exciting rewards, such as points or miles, depending on their credit card’s rewards program. These points can be later redeemed for other benefits.
