How ClearTax is helping millions in India file tax returns

This start-up uses basic information to help you file your tax returns online, reports Tech in Asia

ClearTax is one of those refreshingly simple start-ups that can be described in less than 140 characters: it files income tax returns in India online. When I mention this to its founder, Archit Gupta, he chuckles and agrees. “It’s a simple solution that is working off of this huge shift that’s happening in India right now,” he explains. “This is the first year that the tax process has become so automated. There’s real transparency now.”

The change has been enormous. Last year, less than 3% of those living in India were paying their income taxes. Of this number, 90% claimed to make between Rs 0-500,000 a month and only 1.3% claimed Rs 2,000,000 a month. When you look at income statistics, this doesn’t add up. Furthermore, less than 1% of those who actually did pay income tax filed for returns. Not only does this mean the middle class is bearing the brunt of most of the income taxes collected in India, it also means fewer people are getting the tax returns that they deserve.
 

In the past year, however, the government has aggressively fined those that aren’t paying taxes. In terms of tax returns, their efforts toward digitisation have also proved to be fruitful: just this past July, there was a reported 46.8% increase in the number of people filing for returns.
 

Not all is perfect with the new system, however. “Some things get better with accountability while some processes get slower,” explains Archit. “Non-mainstream players like freelancers and small businesses are having a harder time than ever filing for tax returns.” That little niche, he explains, is where ClearTax finds its footing.

This is an excerpt from Tech in Asia. You can read the full article here.