The thought of filing yearly income tax returns gives the best of us quite a headache. One is likely to get lost among the jumble of figures, deductions, exemptions and tax sections, make mistakes, get bored with the exercise, sit over it for months and finally miss the government’s filing deadline.
Vishvajit Sonagara, taking pity on the fumbling multitudes, founded Quicko.com, “the simplest way to file your taxes online in India.” And it’s fun, he insists.
Quicko provides ITR-1 filing software to Indian taxpayers for free, guarantees 100% accuracy and privacy, maximum refund, expert advice and updates on changes in tax laws. In short, all possible help so that you can do it yourself.
Created by software specialists, Quicko brings with it a fresh perspective and out-of-box thinking, and has an interface that is clean, provides great mobile accessibility and cutting-edge technology.
Vishvajit explains with an example. If you own a house, and happen to have a home loan on that, you will be asked about tax breaks that you would want to claim on this income. These questions are usually in the form of input boxes, with income tax sections marked next to them, such as 80C, 80EE, 24B etc. In the case of Quicko, we ask simple questions - Did you buy a house? Do you have a home loan? If so, how much interest/principal do you pay? “We aim to remove the complexity from filing income tax returns. Simply put, our customers do not require a calculator to file their returns,” he says.
Quicko starts providing services to tax filers from July 1, with the aim of filing 50,000 tax returns in the first year itself, thereby becoming the fourth largest services provider. It plans to more than double that number to over a lakh returns in 2016.
Bootstrapped with a difference
Vishvajit, who has worked in the personal finance space for close to a decade, realised the need for and potential of bringing 21st century personal finance to Indian consumers while working at Fidelity Investments and Deutsche Bank. He noticed how brands like mint.com, wealthfront.com, betterment.com and aspirations.com, involved in personal finance, were a rage in the US.
In India, the government is the biggest service provider but, says Quicko’s founder, it lacks will, vision, and resources to improve online experience. Basically, it provides the minimum common services. That leaves huge opportunities for private service providers, which Vishvajit has made good use of.
“The current landscape does not have a market leader, just a few entrants with varying experience, background, and user base,” he says.
Bootstrapping Quicko with $150,000 of his own money, he spent most of the funds in setting up shop, hiring the brightest talent and cultivating it.
Target audience, investor jackpot
The number of online tax return filers has increased exponentially from just over 20 lakh, to 3.5 crore, in the last five years. That is a whopping 80% compound annual growth, at a time when the government plans to make all tax filing online by 2016.
Most of Quicko’s target audience resides in Tier-1 and Tier-2 cities. “Considering that compliance will improve significantly (30-40%) with digitalization, we are looking at more than 10 crore online tax filers,” says Vishvajit.
He reveals that Quicko has a cost model for more complex use cases such as rent incomes, capital gains, the business profession, etc., and costs for such cases will vary from Rs 100 to Rs 5,000.
Investors are already pitching in. Quicko is engaged in pre-series A funding talks with VC firms in India and the US. Scarecrow, the world’s leading independent agency which has represented brands such as Quikr, Housing, and Viacom as a creative ad agency, has also partnered with the startup in an equity deal valuing over $2 million.
Challenges and growth prospects
For Vishvajit, the main challenge is safeguarding customer data. “Safeguarding it from abuse is a huge challenge for the entire segment,” he says. “Our team has experience in working at the world's leading financial institutions, so we follow same security standards, such as 256-bit encryption, multi-point verification, masked data, etc. All our services are hosted on Amazon’s cloud services, which hosts and runs some of the biggest internet brands, that have secure, scalable and fault-tolerant infrastructure.”
For Quicko, growth opportunities are abundant since most players in the segment are traditional accounting firms “with the narrow vision of providing an online channel to file returns”. Vishvajit says the segment is critically underserved, and considering the digital revolution that is happening in India, there is the chance for huge growth.
Vishvajit believes he is serving the public. “At Quicko, we believe paying taxes is a right and not a responsibility. We believe that providing people an opportunity to exercise their right to pay tax at zero cost is public service,” he says.