PhonePe Launches In-App Tax Filing Feature: Simplifying ITR and GST for Millions of Indians

By Shatabdi Joshi

In a major push to become a comprehensive financial super app, PhonePe has introduced a new Tax Filing feature that allows users to file Income Tax Returns (ITR) and manage Goods and Services Tax (GST) compliance directly within the app. This development marks a significant step in reducing the friction associated with tax compliance in India.

The feature, built in partnership with TaxBuddy, a digital tax compliance platform, offers users multiple options ranging from affordable self-filing to expert-assisted services, all accessible without leaving the PhonePe ecosystem.

Making Tax Filing Frictionless

For years, filing taxes in India has involved juggling multiple portals, understanding complex forms, and often relying on costly chartered accountants. PhonePe aims to change this experience by bringing tax services into the same app that Indians already use for UPI payments, bill payments, and recharges.

The new feature includes:

• Self-filing ITR starting at just ₹24

• Expert-assisted plans for complex tax scenarios such as capital gains, foreign income, or multiple income sources

• Monthly GST filing support specifically designed for small merchants and businesses

This integration eliminates the need to switch between government websites or third-party portals, saving users significant time and effort.

Strategic Partnership with TaxBuddy

PhonePe has collaborated with TaxBuddy to power the backend of this service. TaxBuddy brings AI-driven tools and expert tax professionals to ensure accuracy and optimisation of filings.

Niharika Saigal, Head of In-App Categories at PhonePe, highlighted the company’s vision:

“At PhonePe, we are committed to building a frictionless financial ecosystem that addresses the core utility needs of our users. By democratizing access to expert tax advice and affordable filing solutions, we aim to empower our users, from salaried professionals to neighborhood merchants, to manage their tax filing with ease and confidence.”

Srinivas Reddy, Co-Founder and CTO at TaxBuddy, expressed excitement about the partnership:

“We are pleased to partner with PhonePe to bring our AI-driven, expert-assisted tax services to users across India. This integration is aligned with our goal of making quality tax guidance and filing support accessible at scale.”

How to Use the New Feature

Accessing the tax filing service is straightforward and takes just three steps:

1. Open the PhonePe app and scroll to the ‘Recharge & Pay Bills’ section.

2. Under the ‘Utilities and Others’ sub-heading, tap on ‘File ITR’.

3. Select your preferred mode of self-filing, expert-assisted, or monthly GST filing and proceed.

This seamless experience is expected to appeal especially to young professionals, gig workers, and small business owners who find traditional tax processes cumbersome.

Broader Context: PhonePe’s Super App Ambition

The tax filing feature is part of PhonePe’s larger strategy to evolve beyond payments. The company already offers a wide range of financial services, including:

• Lending products

• Insurance distribution

• Stock broking and mutual funds through Share.Market

• The Indus Appstore, an Android-based app marketplace

By integrating essential services like tax filing, PhonePe is positioning itself as a one-stop platform for everyday financial needs. This move comes at a time when India’s digital economy is maturing rapidly, and users increasingly prefer consolidated platforms over multiple fragmented apps.

Impact on Different User Segments

Salaried Individuals: Can now file ITR quickly with minimal effort and optional expert guidance for deductions and optimisations.

Small Merchants & Businesses: Benefit from simplified monthly GST filing, reducing compliance burden and penalties associated with missed deadlines.

Gig Workers & Freelancers: Gain access to affordable professional help for handling multiple income sources and complex tax situations.

The low entry price point of ₹24 for basic self-filing makes professional-grade support accessible to a much wider audience than before.

Challenges and Opportunities

While the feature is promising, its success will depend on factors like user adoption, data security, accuracy of filings, and seamless integration with government portals. PhonePe will need to ensure robust cybersecurity measures, given the sensitive nature of tax-related personal and financial data.

On the opportunity side, successful execution could significantly boost user engagement and stickiness on the PhonePe app. It may also encourage higher tax compliance rates among small businesses and individuals who previously avoided formal filing due to complexity.

The Road Ahead

PhonePe’s tax filing launch reflects the growing trend of fintech companies expanding into adjacent services to create deeper user relationships. As India moves toward greater digitalisation of government services, such integrations are likely to become more common.

For millions of Indians, this could mark the beginning of a simpler, less stressful tax season. If PhonePe executes well, the feature has the potential to become one of the most used utilities on its already dominant platform.

With this move, PhonePe continues to strengthen its position as more than just a payments app; it is steadily becoming an indispensable part of India’s digital financial life.