Delhi-based ClearSharp Technology Pvt Ltd, owner of ClearTax.in, an online platform for filing income tax returns in India, is only the second Indian company after InterviewStreet (now HackerRank) to be picked up by Silicon Valley-based Y Combinator for its acceleration programme. As part of the programme, the company has also received $120,000 in seed funding. Founded in 2011 by the father-son duo of Archit and Raja Ram Gupta, along with Ankit Solanki and Srivatsan Chari, the startup is currently working on building mobile software, including tools that will allow people to e-file their income taxes using just their smartphone.
Techcircle.in met Archit to know more about the company and its future plans
There are many other tax returns portals. What is your USP?
To use ClearTax, all someone needs to do is upload their Form-16 onto the website. ClearTax's software automatically and instantly pulls out the relevant data; so users don't have to manually key in any numbers or information, and prepares tax forms for each user. The entire e-filing process can take as little as 15 minutes. Our keen focus on simplicity and design helps people successfully e-file. Especially helping people who are approaching tax returns themselves for the first time—we help them successfully e-file on ClearTax.
What is your revenue model?
We charge customers for filing. On the self e-filing side, we operate on a freemium model.
We have Chartered Accountant-assisted services for filing individual tax returns. We have concierge like service for NRI tax returns. We also have filing services for small businesses. We currently target freelancers and small businesses. Most freelancers who come to us today work in the digital industry (they may be programmers, designers, photographers, journalists, etc).
Our tax experts help them plan their business expenses and claim them systematically. We usually save the freelancer much more on their taxes than we charge.
What are the challenges that you are facing in this sector?
Only 4 per cent of Indians file their tax returns today. We think this number can be higher. The government is working towards automation which helps avoid tax evasion and under-reporting of taxable transactions. TDS-CPC, Income Tax CPC are steps in the right direction. More needs to be done in this direction so that folks who should be legitimately in the tax bracket are assessed properly. However, it should be done with data and automation and we do feel the government is on the right path.
Tax refunds should be more prompt as this helps individuals have faith in the government in paying their tax on time. We really like what the government is doing with Form-26AS and more data transparency is the right way forward.
How stiff is the competition in the market?
Our main competitor is the government, which has its own online e-filing software. However, that's fairly complicated to use, since people need to figure out which one out of seven tax forms they need to fill out and it can be overwhelming for people unfamiliar with income taxes. The government software is also very complex as it has a lot of tax jargon. With ClearTax our goal is to help a person file his/her tax return for the first time.
You are the first India-focused startup to get picked up for the YC programme? What does this mean for you? What is the funding amount?
With YC, ClearTax gets more resources. The mentorship we receive and the extremely focused approach YC takes towards tackling large problems is a great learning experience. The YC alumni network is also great and very supportive.
YC has a standard funding programme. They invest $120,000 in every startup.
Do you have overseas expansion plans?
We are looking to expand in global markets in the future. In the short term, we are focused on India. We'll focus on building mobile software, including tools that will allow people to e-file their income taxes using just their smartphone.
(Edited by Joby Puthuparampil Johnson)