Show HN: Income Tax Calculator | Hacker News Reader

Show HN: Income Tax Calculator

incometaxcalculator.net.in

64 pointsrk056749 comments

Nice. However I must ask, the official tax department's site has been revamped and added a very slick calculator [1] a few months or maybe a year ago. Is there a good reason to prefer yours ?

However, if you are an expert in tax rules, here's something I'd pay money for - clear tax guidance in the form of a decision engine, where I can feed my inputs and get an accurate interpretation of the tax rules. I will pay for this as long as you can back the interpretation by a certified tax consultant.

[1] http://www.incometaxindia.gov.in/Pages/tools/income-tax-calc...

> Is there a good reason to prefer yours ?

Maybe not, yet. But over a period of gradual improvement, it may offer something unique to certain niche. e.g beginner users, who would prefer a tax calculation tool with a clear and easy to understand step by step guide, followed by some tax related advise etc (something similar to what you've recommended). Thanks.

How depressing is it for us in the US that the Indian tax code is simple enough that someone can "show HN" a tax calculator.

Have to keep TurboTax and its derivatives in business somehow :)

That's not just a funny comment, it is literally true!

"For more than a decade, Mr. Bankman and a small group of tax experts have called on the government to create a tax preparation method that they say would vastly reduce the time and cost of tax-filing for most people. Intuit has been a primary obstacle to the effort."[0]

[0]: http://nytimes.com/2015/04/16/technology/personaltech/turbot...

It would be humorous if it wasn't so disheartening.

I've always wondered what would/will happen when the tax code gets so complicated that nobody can understand it, and we have to rely on a machine to interpret it. A sort of brave new world where the inputs are collected by computers, the tax is calculated by computers and taken by computers, all understood only by a small cadre of tax coders. Kind of scary.

Milton Friedman explains tax code complexity brilliantly here:

http://youtu.be/TruCIPy79w8

I've been thinking about this recently too. In Australia the government is looking into using IBM Watson to automatically make administrative decisions, e.g. assess applications for immigrant visas.

I can foresee a future where legislation becomes ever more complex and people defer to Watson as the source of truth as there will be nobody left in the public service who needs to know the actual text of the law.

Fun times ahead.

Only because India's tax base isn't as elaborate as the US tax base currently. Gradually this will change, countries like India are growing and the government needs a lot of tax to build infrastructure and other stuff.

I think in the next few decades Indian tax system would equally if not more complicated than the US tax system.

I fail to see why complexity is a necessary result of increasing tax revenues. Most of the complexity seems to come from policy initiatives and successful lobbying of special interest groups .. both of which may be considered to be misguided.

>>I fail to see why complexity is a necessary result of increasing tax revenues.

Because increasing tax base also means increasing the sources which you can tax. In case of India, nearly all business men don't pay taxes. There is a lot of money exchanged through corruption at all levels, there is money exchanged through gifts, dowry etc etc.

Which is why the biggest reforms pending in India currently is to get everyone to have a bank account, so that they can be paid through a bank instead of handing out cash directly. Once the necessary infrastructure is in place(Bank accounts, connectivity etc), you can start reducing the supply of paper money and have people deal in electronic means. You can increase your tax base and cut a great deal of unaccounted transactions and tax them appropriately. You can also cut corruption since a transaction implies a source and receiver, who need to explain what they are doing when a transaction of money is taking place.

That doesn't mean you have to have much added complexity. The complexity doesn't really come from adding sources, it comes from adding exemptions and credits.

e.g. an overly simplistic tax code could read: everyone pays 18% on all income. All money you get from any source is income.

Now clearly that has some problems - but complexity isn't one of them.

Reporting and fraud are separate issues, or at least separable ones.

It was disappointing to see the amount of FUD disseminated over Romney's 2012 plan simplify, broaden, and flatten the corporate tax code.

You only need look at the average Romney voter vs, your average Obama voter to understand why that worked.

How depressing is it for India that cheating on taxes is a national pastime and only 2 - 3 percent pay them?

Much as I abhor the complexity of the US tax system (go flat tax!), at least most taxpayers in the US actually pay.

98-97% people are not "cheating". Most of then don't even fall under category of having taxable income.

Anyone earning below Rs. 200,000 is exempt from Income Tax

I wouldn't generalise.

http://www.ibtimes.com/how-many-people-india-pay-income-tax-...

I agree that a lot of them don't make much income but it is basically a cash economy and many self earners don't report it. I mean if you go there and see the price of things and what people are buying, you know that have to be making more than RS. 200,000. The average BATA shoe store had products costing more than I paid in Target here and I was seeing brisk sales.

I didn't say that. I said cheating on taxes is a national pastime. And that only 2 - 3% pay taxes. Two different assertions in the same general subject domain. I apologize if my choice of words led you to conclude I was saying 98 - 97% are cheating: that was not my intention, and if you re-examine my comment I think you will understand.

The article you reference basically says that of those who owe taxes the only people who don't cheat are the few who work for large corporations who handle the filing of taxes for them.

>>only people who don't cheat are the few who work for large corporations who handle the filing of taxes for them.

People in large corporations are well known to turn in fake rent receipts, produce medical receipts of their relatives/neighbors to claim tax benefits. So whatever 2-3% might be paying, aren't paying it completely.

India needs massive tax reforms.

Its equal to the 1040EZ. I'm not sure what happens when you include other complexities. I know average Indians in India that do use a tax preparer. A good portion just skip paying taxes (I think a 6% compliance rate and I know the lowest tax bracket is not that high.)

Indian tax code is FAR from simple and FAR from being unambiguous. There are seemingly straightforward cases that can easy land you in soup with the tax authorities because it is so difficult to interpret the language. It simply fails to cover all possible cases. That's not to say that US tax code is leaps & bounds better.

I don't understand what is hard in the language: http://www.incometaxindia.gov.in/Documents/direct-taxes-code...

Indian tax code is beautifully spelled out. It is basically a collection of to-do list items with each item having an extremely simple description. For a nominal Indian, you have to, at the most, read this document till point number 85. All the points are collected in groups. So you if you do not have a non-profit org, for eg., you can just skip that entire section.

Don't judge it by it's length. It is extremely clear. So clear that Income tax is taught in grade 8 and 9 in Indian schools.

Here, read this example on how the Assessing officer interpreted the section 54F and put a restriction on tax exemptions. The tax payer had to fight it out in high court for a seemingly straight forward issue. The real problem here is lack of clarity in income tax rules.

http://www.moneycontrol.com/news/tax/joint-ownershiphouse-va...

Have you tried to work out capital gains for NRIs ever? It's a quagmire. Try the forums at r2iclubforums.com and you'll see the same question being asked again and again. Why? Because tax rules are designed to be difficult for common man to interpret clearly.

Interesting sidenote: In Canada, our tax rules are of a similar complexity to yours. The CRA (~IRS) publishes this document, which makes it relatively easy to compute income tax and other deductions: http://www.cra-arc.gc.ca/E/pub/tg/t4127-jan/t4127-15e.pdf

Related, there is an excellent webapp called simpletax.ca, which I've been using to do my taxes for the past few years. It's the most painless tax process I've ever had, so I love it, but it only works on returns going back to 2011.

Every year I seem to have at least one friend ask me to help with their taxes - typically someone who hasn't done theirs in 10 years or more, has no idea where to begin, and whose situation is getting worse every year.

So I always ask the simpletax people to add previous years, even offering to work for them or volunteer time, and the answer has been the same. A very prompt, polite statement that the tax code changes way too much every year and it is logistically impossible for them to cover past years.

I can only assume they're telling the truth and that the problem is impossible for them right now. But it deeply irritates me that the Canadian government doesn't issue its own (free!) software to make it possible for people with the best of intentions to comply with their laws.

Nice. I promise we're telling the truth. ;) The tax code changes a lot from year to year. Even if we had the tax resources to implement prior years (and the cost/benefit made sense), the CRA doesn't retroactively certify products.

I wish there was an easy, silver bullet answer for people who are behind on their taxes, but it really depends on each person's situation.

The better solution is to radically simplify the Income Tax Act. This would make the system easier for everyone and ultimately make products like ours redundant. It's the right outcome and one we'd like to see one day. Until we get there, we fill a critical gap. Free CRA software won't fix the problem and—I'd argue—would be a huge step backwards.

Ha, thanks, I figured you'd be on here. Yes, I really do believe it's a tough problem. I'll vote in favor of any solution that allows people to get their affairs in order more easily. Hope it happens.

Great for just calculating the amount of tax that one needs to pay without going into the process of login and setting up a user account. +1 for the great interface.

Cleartax.in (YC funded) provides a much more comprehensive solution of filing taxes and returns. Although their UI needs a serious upgrade as per today's standards.

Yesterday only, I have used Cleartax.in to file my Income Tax Return. Their service is simple to use and they do appropriate checks to make sure that your filing is consistent.

PS - Not affiliated to Cleartax.

I have tried it, but I didn't understand why I would ever use it. The Income Tax e-filing is already dead simple in India, and has only become better over the years. You just put data in and it basically does everything for you. If you use DSC then it's as instant as it gets.

So I don't really see the benefit of using Cleartax for personal filing. It might be feeding on distrust towards Gov services among people. But IT filing tool is already dead simple and easy.

Cleartax may have uses for businesses if they Uber-ify the hiring of CA for short term.

Hi Arihant,

I work at ClearTax http://cleartax.in - so I'll add some feedback here.

Many people find the Government tool intimidating and difficult to use. It is hard to figure out which Form to file (there is ITR-1, 2, 3, 4S, 4) and now there's a new tax form (ITR-2A) which muddies the waters further.

ClearTax identifies the correct tax form for you automatically. You upload your Form-16 (W-2 equivalent for India) and our software will automatically read everything and fill out the correct tax form within seconds. We'll take you through a simplified form which will ask basic questions and help you make progress. If you get stuck, our support team answers questions or you can buy CA assistance for complex plans.

The Government form is sufficiently complicated for Income earned from Rent (if you own a house), because it won't give you the 30% deduction (Section 24) in the ITR-1.

If you need to figure out long term or short term capital gains when you sell assets, the Government form is very very difficult to use even for experts (We have 10K+ Chartered Accountants using the professional version of ClearTax).

I truly believe that the level of cognitive complexity in the Government's tool is much higher than ClearTax.

Lakhs of users in India e-File on ClearTax because they find it simpler than the Government's tool.

I do agree that for an expert user, the tools may feel equivalent :)

Regards, Archit

The British equivalent: http://www.listentotaxman.com/

Only for people with normal jobs or self employed though, doesn't take things like capital gains or dividends into account (but these have nicer rates than normal income anyway, so it's good as a worst case calculator anyway.)

Even if you're self-employed, it doesn't take into account National Insurance quite correctly.

> "TDS Deducted from Salary"

It would be helpful to explain initialisms like TDS for those who don't know.

Tax Deducted at Source, basically the employer deducts the tax before making the payment to the employee

More here http://en.wikipedia.org/wiki/Tax_Deducted_at_Source

yeah, I should add that. I thought it was too common for target users. Thanks.

I can't help but notice the .net.in domain. I haven't seen this before. Is this like .co.in but for .net versions ?

I feel the website is a good starting point but would be nice if it had more sliders for providing various inputs and a real time update of the tax to be paid.

yeah, I couldn't find anything else.

Points noted. It's the initial version of what I wanted to build. I'll add more features gradually as I get some input/suggestion from the users. Thank you.

ClearTax has a tax calculator as well :D

https://cleartax.in/paytax/TaxCalculator

I think you may have a floating point bug or two:http://imgur.com/zmOCoY0

Thanks. I'll fix that.

Looks nice. Just a question, are you storing the data. (I know not sensitive but still.)

No. Data never leaves the browser (temporarily stored on client's browser using sessionStorage).

Do you store any other data other than typed in, like IP, browser, etc?

Fascinating. My income tax liability in India would roughly match my liability here in the United States (assuming I took similar deductions).

Are there Indian equivalents to the U.S. payroll taxes or other broad-based, non-consumption taxes?

Ugh, taxes are due in 6 days. I have to remember to do them soon.

Really wish this was open source. :/

Looks good.

I used Revenue Canada's instructions for computer programs to create a spreadsheet that I called "payswell". I GPLed it and published it at sourceforge however I only implemented one tax year.

In the US every state has different income taxes; some don't have income tax at all such as Washington. I always intended to create a US spreadsheet but the task seems daunting.

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