Filing taxes is commonly checked out as a cumbersome process and simply forward of the submitting deadline, taxpayers are scuttling about wanting for professionals to do the job for them. ClearTax was based in 2011 with the intention to break the fantasy that tax submitting is difficult. The preliminary ITR software was launched simply earlier than the tax submitting deadline in 2011, when the course of was much more tedious than it’s right now, and it amassed 1,000 customers very quickly. In 2016, the firm launched a software to file GST, and that was obtained so effectively, that ClearTax had to enhance its 30-member staff in mid-2016 to about 300 folks in simply 8 months. Today, ClearTax is utilized by over 5 million Indian taxpayers to e-file their tax returns making it India’s largest participant in the area.
The most fascinating proposition that ClearTax makes is that its built-in software program guarantees to file tax returns of people in simply seven minutes. That proposition alone appears to break the notion that tax submitting is burdensome. Apart from easing the means of ITR submitting, the firm additionally hosts an online and mobile-based ITR and e-TDS software program which helps 1000’s of CA companies and enterprises throughout India handle their follow. Its GST software program is utilized by over 6 lakh companies, 60,000 CAs and tax professionals, and over 1,000 massive enterprises in India. Additionally, the firm presents a ClearTax Invest mutual fund funding platform for wealth technology and tax saving as effectively.
Expert opinion: TechArc chief analyst Faisal Kawoosa says, “These portals are very helpful for solopreneurs in addition to SoHo startups who need to self-serve their tax associated work. Most of the occasions one wants a counsel in these issues and these portals act identical to ‘service tax consultants’ including worth.”
Gadgets 360 spoke to ClearTax Founder, Archit Gupta to know a bit extra about the firm’s overwhelming journey to this point and its future plans.
1. What have been you doing earlier than you started ClearTax?
Before ClearTax, I used to be working at an early-stage IT agency Data Domain, in Silicon Valley.
2. What impressed you to start ClearTax?
I used to be impressed by the startup atmosphere in Silicon Valley the place folks solved complicated issues utilizing expertise. During my visits to India in the summer season of 2010, my father (a Chartered Accountant) and I started to talk about the complexities of the authorities’s just lately launched on-line tax submitting portal. I discovered that not solely a mean taxpayer however even the professionals struggled to function the portal.
The authorities platform had an Excel-based software. Taxpayers had to obtain a file after which generate an XML file earlier than importing it manually. It was an enormous downside and wanted an answer.
I went again to my job and spent the subsequent few months making an attempt to gauge the feasibility of constructing a self-serving platform. Initial analysis confirmed that not many Indians filed tax returns, largely due to ignorance about the ramifications of failing to accomplish that and the tedious course of concerned.
Only 4.36 crore tax assessments have been made in fiscal 2011-12, or 3 to 4 % of India’s complete inhabitants. I used to be satisfied of the alternative. With assist from a bunch of interns, I had the first model of ClearTax prepared in 2011.
3. Were there any hurdles you confronted throughout the inception course of?
It was a protracted and lonely journey earlier than recognition got here my manner.
Tax submitting was a posh downside once we began out in 2011. India had a restricted tax web with a low tax compliance charge. Fintech was neither part of the Indian nor the international lexicon. Building ClearTax on this panorama was a bit counterintuitive and went in opposition to the well-liked notion. Hence, I met with a whole lot of resistance after I stop a high-paying Silicon Valley-based tech job.
However, we launched ClearTax 11 days earlier than the tax submitting deadline and obtained over 1,000 customers. While this gave me the confidence to transfer forward, enterprise capitalists didn’t see worth in the product. The VC group was largely funding e-commerce corporations. There weren’t many angel buyers, and it was robust to compete for capital. We remained bootstrapped for three and a half years. There have been a whole lot of troublesome nights and weekends as we have been making an attempt to execute a bigger imaginative and prescient with out cash.
4. What was it like in the first yr of being in enterprise? What are your key learnings from the early days?
Since we have been bootstrapped, we solely had sufficient to pay a few full-time engineers. The founders didn’t get any wage. We could not even afford flight tickets to journey for enterprise growth and we labored on second-hand laptops. But we sailed via robust occasions. The key studying is to by no means hand over and preserve evolving with rising dynamics. It is vital to be diligent and preserve the pack motivated via thick and skinny.
5. How did you construct the software program behind ClearTax? How did you acquire the needed authorities approvals?
The first model of our tax submitting platform was constructed by us with the assist of our interns. We launched it 11 days earlier than the tax submitting deadline and obtained over 1,000 customers organically. We have authorised e-return intermediaries and are absolutely compliant with all norms.
6. Which yr was your most vital? Could you provide extra particulars on what occurred via that yr?
We discovered fairly rapidly that the product we created in client taxes served real-world limitations. We had very excessive buyer engagement, buyer satisfaction, and extraordinary natural development.
In 2016, the authorities was wanting to digitise each single enterprise in India. The alternative got here in the type of constructing tech instruments that have been celebrated by clients and companies alike. We constructed a software to file GST and it was an instantaneous hit. We scaled our 30-member staff in mid-2016 to about 300 folks in simply 8 months. In different phrases, the staff measurement grew by 10X. It largely explains the significance that the yr had for us and our enterprise mannequin.
The development was supported by capital that we raised from Sequoia, Saif companions, and different buyers that yr.
7. What are the options you provide for people, SMEs, and enormous companies? Please elaborate
ClearTax has constructed easy and easy-to-use software program for all monetary wants of people, companies, organisations, and CAs. Our product choices embody:
Tax submitting – ClearTax is a product designed for people to put together and file their Income Tax Returns in the shortest time whereas maximising their tax deductions. Our intention is to delight our clients with simplicity, accuracy, and eliminating the notion that taxes are complicated. ClearTax right now is utilized by over 5 million Indian Taxpayers to e-File their Tax Returns making it India’s largest participant in the area.
TaxCloud – TaxCloud is an online and mobile-based ITR and e-TDS software program which helps 1000’s of CA companies and enterprises throughout India handle their follow. The software program allows CAs to examine the submitting standing of their purchasers anytime and from wherever and comes loaded with options like automated choice of the appropriate ITR kind. The software program will even import the TDS, TCS, self-paid tax entries instantly from the kind 26 AS, thereby eliminating any guide information entry. It permits direct e-filing with digital signatures and simple revisions.
ClearTax GST – The ClearTax GST software program, India’s first ready-to-use GST-compliant billing and submitting resolution, is at present utilized by 6 lakh companies, 60,000 CAs and tax professionals, and over 1,000 massive enterprises in India.
Tax saving + Wealth technology – ClearTax Invest presents a mutual fund funding platform for wealth technology and tax saving. It presents clients handpicked funding plans with full steerage on mutual funds. ClearTax Invest helps its clients to put money into the finest performing mutual funds of the yr and let their cash develop via the energy of compounding.
CA and Legal Services – ClearTax CA and Legal Services presents a number one market platform for monetary and compliance providers, catering to 300,000+ companies/people at current.
ClearOne – ClearOne is GST invoicing software program for Indian companies.
8. How do you monitor these options and be certain that they’re up to date with the newest tax clauses?
All regulatory compliance is in place. Being a tech options firm for taxation and compliance, we consistently replace the platform in accordance with change in the respective acts. On the buyer entrance, we conduct consciousness initiatives together with webinars and alerts about any regulatory overhaul.
9. People utilizing ClearTax enter delicate particulars and data relating to their funds. How do you make sure that information fed into the servers is well-protected?
ClearTax’s software program incorporates a number of completely new applied sciences that enhance the degree of safety in opposition to on-line fraud and malicious assaults and defend in opposition to the dangers of engaged on weak Wi-Fi networks. ClearTax’s information centre (AWS) is ISO 27001 licensed, which supplies utterly secured entry to VPC guarantees with authenticated entry solely. The platform additionally supplies our clients with scalability and suppleness.
The firm additionally presents bank-grade safety to its clients. Being an middleman, we comply with each regulation set by the division and get audited by the banks usually. The largest corporations and banks belief us with their information.
10. Could you assist give a way of how far ClearTax has come? From when it started to the place it’s now.
ClearTax posted income of Rs. 60 crore in FY 2020, a 163 % surge over the earlier yr’s Rs 22.8 crore. The tempo of development additional will get amplified when contrasted in opposition to simply Rs. 80 lakh in the 2017 fiscal. The enhance in the variety of particular person customers over this era grew from 8 lakh to 40 lakh, which is equally staggering. Today, we course of over $200 billion of GST (Goods and Service Tax) (roughly Rs. 14,60,107 crores) in India. This makes us the greatest entity after the authorities to accomplish that.
At current, we’ve greater than 48,000 tax professionals together with CAs registered with our platforms – a four-fold enhance from the FY 2016-2017 degree. We didn’t have any enterprise registered with us in FY 2017. Now, there are greater than 1,200 enterprises on board and the determine has been multiplying yr after yr.
Revenue (unaudited numbers):
FY 2016-17 – Rs. 80 lakhs
FY 2017-18 – Rs. 15.1 crore
FY 2018-19 – Rs. 22.8 crore
FY 2019-2020 – Rs. 60 crore
11. What was the influence of the COVID-19 disaster? How did you take care of the challenges of the lockdown? What was the income like final yr?
Employee security is essential to us. We zeroed in on a work-from-home mannequin effectively earlier than the lockdown.
When the lockdown triggered, it led to a whole change in the income trajectory. There was a unfavorable undercurrent and the prevailing sentiments turned every little thing upside-down. Our enterprise, fortuitously, remained resilient. As companies began opening up after the first two months, the authorities additionally began specializing in tax collections, making the platform rebound strongly and surpass the pre-COVID ranges.
We are in the proper place at the proper time. We have been fixing an vital downside as digitisation continues to speed up in India and COVID is catalysing the tech adoption even additional. Software-as-a-service and taxation-related platforms grew quickly each globally and domestically. Overall, the platform resilience and the scale stored on growing and we recovered to pre-COVID ranges.
12. Do you’ve gotten any administration recommendation that you just’d like to share with future entrepreneurs?
The time to begin up is ‘now’. Don’t wait for your resolution to develop into completely excellent earlier than its launch. Avoid ready for the excellent enterprise or product title. Trust your guts, go forward, and preserve reinventing your line of method.
13. What is the one piece of recommendation you’d give to taxpayers on the market?
Tax deductions will not be solely a method to minimise your tax legal responsibility but additionally provide an avenue of wealth creation. You should not take into account investments and tax returns as two separate features. Rather, consider them as two totally different phases of capital development. While investments maximise your returns, the tax-related financial savings minimise your income outflows. Also, each of them have to be pushed all through the yr and never simply at the finish of the identical. It will make your method rather more environment friendly and versatile.
14. What are the large plans for the future?
We need to proceed to ease tax compliance for all stakeholders, develop our tax submitting and funding app Black and in addition enter into different monetary enablement providers for enterprises.
14. What is the worker energy? Is ClearTax hiring at present?
Cleartax has about 1200 workers. We are wanting to add one other 100 throughout engineering, product administration, enterprise gross sales, advertising, and class roles throughout the firm.