Could the complexity of our tax filing paperwork be one reason behind India’s low income tax filing rate? ClearTax’s investors certainly think so, and have invested ₹13.5 crores to help the provider of e-filing services launch a do-it-yourself online tax savings and investment tool.
ClearTax, which has over one million users, is targeting five million users by the end of the year, Archit Gupta, ClearTax Founder and CEO, told HuffPost India. It will use a portion of the funding on the marketing of its new tax savings product, ClearSave, expected to be launched over the next two months, said Gupta. It plans to further diversify its range of fin-tech products over the next few years in areas such as payroll and peer networks, said Gupta.
“We are on a mission to simplify financial lives for India,” said Gupta, adding that tax filing and tax savings is usually a cumbersome process, which usually makes most people turn to chartered accountants. The company’s products are designed to help millennials and laypeople navigate the complex tax filing process through an app or a desktop tool.
The latest funding, a pre-series A round, was led by Sequoia Capital and Founders Fund Angel, which have each invested US$1 million into the company.
Clear Tax, founded in 2011, has previously raised ₹8.6 crore in angel funding from Silicon Valley investors Max Levchin, Neeraj Arora, Scott and Cyan Bannister.
The deal also marks the first India investment for San Francisco-based Founders Fund, which has previously backed such companies as SpaceX, Palantir, Facebook, and Airbnb.
ClearTax’s new investors bring both a deep understanding of the fin-tech space, ClearTax Chief Executive and Founder Archit Gupta said.
In addition to individuals, over 10,000 chartered accountancy firms and businesses use the ClearTax platform for Tax-related services, said Gupta.
Recent government data shows that only about one per cent of the Indian population pays individual income tax. There have been several calls from the industry for the government to simplify the tax structure.
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