Credit card income tax, insurance, education and utility payments: do they earn rewards?

Do credit cards earn rewards on insurance, tax, education and utilities?

Some do, usually with a cap or a ban. ICICI's MITC lists high volume of bill payments and excessive insurance payments as usage out of line with retail use, and says it may cancel the card and withhold points at its sole discretion. Axis also says it may cancel a card and withhold points over misuse of reward programmes.

These are the rules we read in each bank's own document on 31 October 2026. HDFC's MITC, updated 29 October 2026, and ICICI's, last updated 9 October 2026, set rules across their cards. Kotak's sets them by card group. SBI Card's and Axis Bank's MITCs set no general rule here, so those rows cover only the cards whose terms we could read.

Read at source on 31 October 2026. Kotak's table took effect on 1 June 2025. Kotak ended Reward Points on Dream Different on 1 April 2026. Its cashback programme began with the September 2026 billing cycle, and Kotak's MITC refers to its website for the exclusions. ICICI excludes Amazon Pay ICICI from the government change. Earn rates shown are for the named card only. Other cards in a row may earn at a different rate.

What does our catalogue show, bank by bank?

This table groups the reward exclusion wording we hold by bank, with a card count, source and date. It does not name cards, and a card with no wording held is left out, so a missing card does not prove it earns. Rows marked Not confirmed were not verified.

400 of 562 open cards, from 34 banks. 162 open cards have no figure here because we did not find one. Rows marked Not confirmed are figures we could not check against the issuer document, so check with the bank.

Do banks charge a fee on insurance, tax, education or utility payments?

On utilities and on education paid through apps, usually yes, at 1% plus GST. We found no bank fee in these documents for insurance, and none named for tax, though ICICI and AU leave government payments unclear. Tax still carries a gateway charge, covered below.

Paying a school or college directly avoids the education fee at HDFC, SBI Card, Axis, RBL, YES BANK, AU and DBS, which all say so. ICICI and Kotak charge the app fee but do not address direct payment in the lines we read.

"None listed" means we found no such line in the bank's MITC or fee schedule, not a promise that none exists. Add 18% GST to each fee.

Is it worth paying income tax by credit card?

Only if your rewards or the free credit are worth more than the charge, which is 0.72% to 1% plus 18% GST at the gateways on the tax portal. On Rs 1,00,000 that is about Rs 850 to Rs 1,180. A card that pays no rewards on tax gets only the interest-free days for it.

The Income Tax Department's e-Pay Tax manual lists these charges in Annexure 2 and says they apply over and above the tax amount. It says the debit card mode for authorised banks and the bank counter mode carry no charge. UPI is nil at the gateways that list it.

An example. You pay Rs 1,00,000 through a gateway charging 0.85%. The charge is Rs 850. GST at 18% adds Rs 153, for Rs 1,003. Your card is billed Rs 1,01,003. To break even, your rewards must be worth more than Rs 1,003, a return of 1.003%.

What the rewards pay. On an HDFC personal card, government payments earn no points, so the return is zero. On ICICI Coral, tax counts as utility, which earns 1 point per Rs 100 on the first Rs 40,000 per cycle. That is 400 points at most, so each point must be worth about Rs 2.51 to cover the charge. ICICI's MITC does not say whether its 1% utility fee above Rs 50,000 also applies to government payments. If it does, the cost rises by up to Rs 1,180 with GST, so ask ICICI first. See what points fetch.

What the free credit pays. HDFC says the interest-free period could range from 20 to 50 days, and that it does not apply if the previous month's balance has not been cleared in full. Paying Rs 1,003 to hold Rs 1,00,000 for 50 days works out to about 7.3% a year. For 20 days it is about 18.3% a year.

If you do not clear the bill. At 3.75% a month, HDFC's rate for most cards, one month's interest on Rs 1,01,003 is about Rs 3,788, and GST adds about Rs 682. That is about Rs 4,470 for the month, more than four times the charge. See what paying only the minimum costs.

From Annexure 2 of the Income Tax Department's e-Pay Tax manual, read on 31 October 2026. The ICICI and Bandhan lines have no asterisk, though the 18% GST footnote is printed under their tables, so we added GST. Kotak's gateway also lists 2.75% for international credit cards and ICICI's lists 0.78% for corporate cards. Those two lines are left out above, and the other gateways list no separate rate for international cards. The rates can change: check the payment screen.

Do insurance premiums earn rewards, and is there a fee?

Many cards earn on insurance up to a cap, and some earn nothing. HDFC caps points at 2,000 a month on most cards, ICICI Coral earns on the first Rs 40,000 per cycle, and Axis Select and SBI CASHBACK pay nothing. We found no bank fee for insurance in the MITCs and fee schedules we read.

LIC says renewal premiums paid by credit card online, through its Customer Portal or Pay Direct, carry a convenience fee that LIC absorbs entirely. That line does not cover agents or third-party apps, and we did not read other insurers' pages, so check the payment screen.

An example. You pay a Rs 1,00,000 LIC premium on HDFC Regalia Gold. Its page gives 5 points per Rs 200 on retail spends, which would be 2,500 points, but the insurance cap stops you at 2,000 in that calendar month. On Regalia Gold's page, a point is worth Rs 0.50 on flights and hotels, so Rs 1,000. As statement credit, at Rs 0.15 under HDFC's MITC from 1 November 2025, it is Rs 300, less a redemption fee of Rs 50 plus GST, Rs 59. That leaves Rs 241.

Does paying school or college fees by credit card earn rewards?

It depends on how you pay. HDFC gives no points on education paid through third-party apps such as CRED, Cheq and MobiKwik since 1 September 2024, and reverses any that post. It also gives none at all on named business cards and Swiggy cards.

An example. Rs 1,00,000 of tuition through an app at a 1% bank costs Rs 1,000, plus Rs 180 GST, for Rs 1,180. Paid on the college's own website, HDFC, SBI Card, Axis and RBL charge no bank fee.

Paying directly does not guarantee points. Axis Select pays none on educational services, SBI CASHBACK pays none on school and educational services, and Kotak's League Platinum group pays none. HDFC's MITC does not exclude direct payment on its other cards, but your card's own page may.

What is the maximum reward on utility bills, and when does the fee start?

HDFC caps utility points at 2,000 a calendar month on most cards, and ICICI Coral earns on the first Rs 40,000 per cycle, Sapphiro and Emeralde on the first Rs 80,000. Kotak stops at Rs 35,000, Rs 50,000 or Rs 75,000 per cycle, by card. The 1% fee starts between Rs 15,000 and Rs 75,000 of utility spend, by bank and card.

An example from SBI Card's own MITC. Utility payments of Rs 20,000, Rs 20,000 and Rs 24,000 in one cycle total Rs 64,000. The fee is 1% of the total, Rs 640. GST at 18% adds Rs 115.20, for Rs 755.20.

How the fee is counted differs. HDFC and SBI Card charge on the whole total once you cross the line. Axis charges Rs 250 on exactly Rs 25,000 in its own example. Kotak's worked example, on wallet loads, charges only the part above the limit, and its utility line also says spends exceeding the threshold.

Do these payments count toward milestones and annual fee waivers?

Often not, and the rule differs by bank and benefit. ICICI's spend threshold for annual fee reversal and milestones excludes government and education payments from 15 November 2024. Axis's MITC rule covers the annual fee reversal threshold only.

Axis excludes utilities and government from that threshold on Select, Reserve, Magnus and Magnus for Burgundy from 1 September 2023, and insurance from 20 April 2024. Its Atlas terms leave government, insurance, utilities and telecom out of tier and milestone spend. Kotak leaves utility, education, government and insurance out of milestones under its revised programme.

So Rs 1,00,000 of tax on an ICICI card pays the gateway charge of about Rs 1,003 and moves you no closer to a milestone. On Axis Magnus it pays the same charge and does not count toward annual fee reversal.

How does a bank decide a payment is tax, insurance or utility?

By the merchant category code on the transaction, which the card network sets. YES BANK says the codes are set by Visa, Mastercard or RuPay, not by the bank, and SBI Card says it identifies them on a best effort basis.

We do not cover ways to change how a payment is coded. If a payment is coded wrongly, raise it with your bank and quote the code.