Filling Forms Online using ITR as an Example

It was over 30 years ago. I was sitting with a client helping create a transaction entry form for batch processing. It surprised me that something as trivial as the use of a client code was not obvious. It was odd to have to explain that once the client code is entered, there is no need to enter all the information to identify a client uniquely. The name may be entered as a verification that the account code was correct. The problem was that the client's perspective was different - how would the user looking at the transaction form know who the client was. So, to the client, the transaction form I was suggesting seemed user-unfriendly!

I remembered this incident as I was just about to complete the income tax return, ITR-1, online. There was just one data field left. It was an information only field – tax exempt income, e.g. from mutual fund dividends. The form would not let me enter the 5th digit. It seemed like a bug and I posted a query. The response was pretty quick. If the tax exempt income exeeds Rs. 5000, ITR-2 needs to be filled. The latter is considerably more complex and wasn't available online.

Since the tax savings options encourage investing in mutual funds, there must be a lot of people, especially retired who have tax exempt income from dividends. One solution could be create another form which is only a little more complex than the existing ITR-1 form. But that would complicate the decision of which form to fill.

The improvement in the ease of filing income tax returns in recent years has been phenomenal. The reduction in the papers which need to be submitted stands out in contrast to the rest of the bureaucracy. The option to move online provides another opportunity to re-examine the process and make is easier still.

Tax Filing Application instead of ITR Forms

The question arises that do you need to map online forms to the standard print forms. It is pretty obvious that the form the way it is entered by the tax payer does not have to be the same as the way a tax inspector sees it.

You may view filing of an income tax return by a tax payer as an application. This application can be driven from the perspective of the tax payer rather than the income tax office. The primary selection critetrion for which ITR form needs to be filled is the nature and source of a person's income.

So, the application should start with letting the tax payer enter all his sources of income, including the tax exempt income. A new tax payer, as I recall doing, may not realise that the gross income is supposed to exclude the tax exempt income! I remember not being able to figure out how to deduct the tax exempt income to get the correct taxable income and had to seek help.

Based on the sources of income, the application can determine the mandatory and optional fields which may need to entered.

The person filling the return need see only what is applicable to him given the sources of his income.

The same strategy can be followed for the expenses and deductions applicable for a reduction in tax liability.

As at present, businesses and professionals will need to submit the balance sheet just as they do now with the ITR-4 form. The online process may not decrease the amount of information a taxpayer needs to supply. Only the visible complexity of the application increases based on what is needed from the taxpayer. At the end, the application can submit the appropriate ITR form for processing, without the taxpayer having to decide on which form is applicable for him.

The key difference, thus, is that the the application decides which form is applicable based on the data rather than the taxpayer deciding first and then filling the fields appropriate for him. Futhermore, seeing only what is needed makes it much more likley that the returns submitted will be free of errors caused by any misunderstanding of the interpretation of various similar fields.

Open source tools make it easy for the development of complex applications with dynamic forms.

Consider the example of Django. Among the design options available for your consideration are as follows:

  • You may use the conditional (if) blocks in the template language for some fields to be included or not based on values of variables at runtime.

  • You may create multiple templates. The application can determine at runtime which template needs to be used.

  • You may programmatically add or delete fields in a form.

  • You may use a application like the “form wizard”. A form wizard allow you to split forms across multiple web pages. It will maintain the state on the backend so that the processing on the server side is delayed until the final form is submitted.

Hopefully, the income tax return application can become a model and reference point for all future applications using which the citizen needs to interact with the government.

Sep 2013