ClearTax

ClearTax is an Indian Income Tax Return e-filing website. ClearTax is one of the most popular tax preparation and e-filing platforms in India, along with the Income Tax Department's website.^[1]

ClearTax was founded in 2011. In 2014, the company became the first India-focused startup^[2] to be funded by Y-Combinator. ClearTax has offices in New Delhi and Bengaluru and has been used by nearly 1.5 million Indian taxpayers^[3] to e-file their tax returns.

In April 2016, ClearTax received $1.3 million of seed funding from Silicon Valley investors, including PayPal co-founder Max Levchin and Scott Banister, who was an early investor in Facebook and Uber.^[4] Later on in May 2016, ClearTax received a second round of funding of $2 million from Sequoia Capital and Founders Fund.^[5]

In May 2016, Tech In Asia named ClearTax among the 4 rising startups of India.^[6]

History

ClearTax was founded by Archit Gupta and his father, Raja Ram Gupta in 2011. Archit Gupta is an IIT Guwahati alumnus who went on to pursue Masters in Computer Science from the University of Wisconsin-Madison. The idea to simplify e-filing of income tax returns came to him when he was unable to file his tax returns online from the US in 2010 through the Income Tax Department’s utility.

The first version of ClearTax was launched in July 2011 by Archit Gupta and his co-founders Srivatsan Chari and Ankit Solanki. Srivatsan Chari is a graduate in Computer Science from BITS Pilani, Dubai while Ankit Solanki has done Bachelor of Engineering in IT from Mumbai University.

In 2014, ClearTax was accepted into the Y-Combinator Summer Batch of 2014 (YCS14), becoming only the fourth Indian startup to be funded by Y-Combinator and the first one to be focused on the Indian market.

ClearTax first started operations from New Delhi and later on, in 2014, moved their headquarters to Bengaluru. As of May 2016, the company has operational offices in both cities as well as presence in Mumbai, with a combined team strength of around 60 across verticals like engineering,^[7] accountancy, design, content, business development, human resources and administration.

Software

File income tax returns with ClearTax

ClearTax has an intuitive tax preparation software that eases the e-filing process for its users.^[8] The software automatically selects the correct ITR form and prepares the tax returns when a user uploads their Form 16. Users can also manually fill in their details into the ClearTax software to e-file their tax returns and maximise their tax saving.

ClearTax is considered a pioneer in the Financial Technology (FinTech) space. The company’s tax preparation software has allowed taxpayers to simplify their finances.^[9] ClearTax’s success has seen a spurt of similar platforms in the Indian market to cater to the e-filing taxpayer.

Android app

In May 2016, ClearTax launched an Android app to facilitate e-filing on the go.^[10] In the AY2015-16 tax season, ClearTax had seen nearly 5% of e-filings happen through mobile phones, which prompted them to develop an app for AY2016-17.

With mobile penetration and internet access increasing every month, the ClearTax app is expected to further ease the e-filing process^[11] for Indian taxpayers. An app for iOS and Windows devices is also being developed by the company.

Products and Businesses

ClearTax helps people e-file income tax returns by parsing the uploaded Form-16 as compared to Income Tax department’s excel/Java based software.^[12]

The company offers the following products in the 'taxes' domain:

1. ClearTax (https://cleartax.in/) - Helps individuals e-file their income tax returns in the shortest time possible.
2. ClearTDS (https://cleartds.com/) - Provides organisations with a cloud-based platform to file TDS returns^[13] and generate Form 16s.^[14]
3. TaxCloud (https://taxcloudindia.com/) - Designed for CA firms to help their clients file IT and TDS returns.

The self-filing platform is the company’s flagship product.

Funding

ClearTax received seed capital of $120,000 (around Rs 73 lakh) from Y-Combinator in 2014.^[15] In April 2016, it received another $1.3 million of seed funding^[16] from Silicon Valley investors, including PayPal co-founder Max Levchin and Scott Banister, who was an early investor in Facebook and Uber. Other prominent investors in this group include WhatsApp’s Business Head Neeraj Arora, AngelList Founder and CEO Naval Ravikant, ex-Dropbox VP Ruchi Sanghvi, Y-Combinator alum Sumon Sandhu and Flexport Founder and CEO Ryan Petersen.

In May 2016, ClearTax received a second round of funding of $2 million^[17] from Sequoia Capital and Founders Fund,^[18] the angel investing arm of Peter Thiel.^[19]

Key Partnerships

• Government of Karnataka partnered with ClearTax for their m-governance platform — Karnataka Mobile One to provide e-filing services to all Karnataka citizens.^[20]
• Institute of Chartered Accountants of India (ICAI) launched TaxCloudIndia in partnership with ClearTax as an initiative for capacity building of CA firms and small & medium practitioners.^[21]

References