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TCS e-filing system for the income tax department

Bridging The Two ITs

TCS’s user-friendly e-filing system for the Income Tax department is marked by speed and efficiency

February 2020     |     1226 words     |     5-minute read

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The average tax paying citizen has at least one thing in common with Albert Einstein. Apparently, the great physicist once told his tax accountant, “The hardest thing to understand in this world is income taxes.”

For years, Indian taxpayers used to feel a similar sense of frustration at the needless complications and long hours of standing in queues for filing of income tax return (ITRs). Until 2012, when Tata Consultancy Services (TCS) stepped in with a user-friendly system that was not only taxpayer friendly but also provided information through pre-filled forms and handholding e-filers, besides a responsive helpdesk.

The system’s success was demonstrated by the filing of 56 million ITRs in the assessment year 2019-20.

Mega transformation

Tej Paul Bhatla, head of TCS’ Public Services Business Unit in India, says, “The IT returns e-Filing project is a mission mode project under the Government of India’s national e-Governance Plan.” This project was conceived for making the income return filing easy and transparent for citizens without the hassles of long queues and confusion over documents.

Given TCS’ track record in handling large-scale transformation projects in India, TCS was awarded the project. 

The system — comprising implementation of the e-Filing system for filing ITRs and other forms, as well as web-enabled services — went live in 2012. It also included seamless data migration from the legacy system, and integration with internal and external systems for various tax-payer-related services.

Over the last 6-7 years, the system has not only achieved the objective of providing ease of doing business for taxpayers, it has also transformed the business process and made it much more efficient. Eg, Taxpayers are no longer required to print the return, sign it and mail it to the processing centre. Linking with the Aadhar card and bank account and pre-filling as much information in the return as possible has further streamlined the process and the taxpayer can now file his return within a few minutes.

Flawless framework

While TCS associates brought in the right technological skills, people with domain expertise on tax matters were required. Mr Bhatla states, “We invited some chartered accountants to be a part of the project. Their role was to interpret the financial requirements of the income tax department (ITD) including the various provisions of the Income Tax Act, for the benefit of our specialists and to ensure business requirements were clearly understood and implemented.”

The enhanced e-Filing system uses all the data available with the ITD; users now need to fill in only the income details of the current year. TCS is involved in the end-to-end process of filing the tax returns including keeping the software and the infrastructure running flawlessly on a 24x7 basis and also running a call centre to address the problems of citizens who need guidance on the ITR filing process.

Challenges galore

Given the project’s significance, there were several challenges. To begin with, the project had a fixed price and schedule. Mr Bhatla says, “We had to deliver the project within the timeframe and budget that we had committed in our proposal. We also had to ensure that the ITD was with us at every step, and that we understood the provisions of the Income Tax Act correctly in order to ensure that the system made the right calculations for the accurate computing of returns.“

One of the most critical challenges was to ensure that the system performed to expectations in terms of volumes and transaction time. For this, the team had to assess the capacity of the required infrastructure, besides keeping pace with real-time volatility in terms of changes in legislation or statutory requirements.

All systems secure

The system had to function to its optimum efficiency at all times, particularly during peak periods between April-July when the bulk of IT returns are filed. In fact, this year, as it usually happened in previous years as well, the highest number of returns were filed during the last three days before the due date. Mr Bhatla says, “One way to do that is to build capacity for a maximum transaction load. One of the best practices that we built into this project is that instead of building excess capacity which would lie idle for 8-9 months, we brought in additional capacity during the peak period.”

TCS’ Security Operations Control centre was deployed to monitor and eliminate any rogue access point threats. Government agencies like the Standardisation Testing and Quality Certification (STQC) organisation also inspected the system on a quarterly basis to ensure security. TCS’ best practices for ensuring security of mission critical applications include ethical hacking, a simulation of a hacking, to ensure that the system was failsafe and there was no threat of unauthorised access.

The e-Filing system’s success can be gauged from the fact that the ITD made history this year, seeing a quantum jump in the number of ITRs filed. In fact, on August 31, 2019, the last date for filing returns saw an all-time high record of 4,929,121 returns being filed, 41 percent higher than the returns filed on August 31, 2018, at the rate of 196 returns per second. These e-Filing transactions were over and above other types of transactions processed in the e-Filing portal whose volume during the financial year 2018-19 was more than 5 times the return filing transactions. Mr Bhatla is justifiably proud of TCS’ role in this achievement. He says, “No tax administration anywhere in the world has achieved such a large number of ITRs being filed online in a single day and that too so smoothly.”

The system has recorded good year-over-year growth of ITR and other usage, with a CAGR of approximately 13 percent since the e-Filing system went live. The increase in volume has widened the tax base.

The smooth functioning of the e-Filing system enables ITD to run analytics on the available database, so as to analyse data like the speed at which returns are being filed or the number of first-timers who have filed ITRs.

Benefits of the e-filing system

  • E-verification of the ITR using the electronic verification code or Aadhaar OTP, thereby enabling faster ITR processing and eliminating handling of physical ITRs.
  • Pre-validating bank account details for faster refund processing.
  • Integrating with Aadhaar for OTP based e-verification, demographic details verification and e-KYC. 
  • Providing appliance-based solution for message processing.
  • Ensuring faster response at each level for optimal performance. 
  • Implementing near real-time asynchronous mode of request response handling. 
  • Segregating applications based on usage/criticality so that each application works independently. 
  • Implementing the e-filing lite version only for ITR filing enables faster filing of ITRs. 

Going beyond

“TCS is proud to have been associated with the ITD for the e-Filing project which has significantly contributed to the ease of filing tax returns by citizens. We have received excellent support from the ITD. We are also grateful to citizens for their constructive critique and adapting to the e-Filing system.

“Working on a mission mode project gives us a deeper experience of systems integration. We are able to work with the database, operating system and software licences, going from requirement specifications to building, testing and delivery, making changes as the system goes live,” says Mr Bhatla.

TCS has proven that it is ready for bigger challenges. Surely, even Einstein would have found ITR filing less challenging on this system. Now if we could only say the same about the theory of relativity.

—Cynthia Rodrigues

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