T.Z.A.S.P.

MANDALS

PRAGATI COLLEGE OF ARTS, COMMERCE AND SCIENCE

CERTIFICATE
This is to certify that Ms. Priyanka Khedlekar (Roll no. 29) and Ms. Namrita Sundarraj (Roll No. 34) from S.Y B.SC (IT) have successfully completed the case study entitled as Income Tax Return File Handling System under the guidance of Madam Mrs. Rupali Patil during the academic year 2009-10.

Date : __________

Professor-in-Charge Mrs. Rupali Patil

T.Z.A.S.P.MANDALS

PRAGATI COLLEGE OF ARTS, COMMERCE AND SCIENCE

CLASS: S.Y.B.Sc.(IT)

A CASE STUDY REPORT ON INCOME TAX RETURN FILE HANDLING SYSTEM

PRESENTED ON : 19TH MARCH, 2010 ABLY GUIDED BY Madam Mrs. Rupali Patil

SUBMITTED BY 1. Ms. Priyanka Khedlekar 2. Ms. Namrita Sundarraj Roll No. 29 Roll No. 34

INDEX

Sr. No. 1. 2. 3.

Contents Organization Overview Current System y Limitations of Current System Proposed System y Advantages and Features y Limitations Gnatt Chart E-R Diagram Data Flow Diagram(DFD) y Context Level Diagram y Context Analysis Diagram y Complete DFD Functional Decomposition DFD Fragmentation System Flowchart Structured Chart Menu Tree y Table Listing y Report Listing Form Layout References

Page No. 4 5 6 7 7 9 10 11 12 13 14 15 16 18 19 20 21 22 24 27 29

4. 5. 6.

7. 8. 9. 10. 11.

12. 13.

ORGANIZATION OVERVIEW

The direct tax which is to be paid by the individual to the Central Government of India is known as Income Tax. The Government of India imposes an income tax on taxable income of individuals, Hindu Undivided Families (HUFs), companies, firms, co-operative societies and trusts (identified as body of Individuals and Association of Persons) and any other artificial persons. The levy is governed by the Indian Income Tax Act, 1961. It is imposed on our income and plays a vital role in the economic growth and stability of our country. For years, the Government is generating revenue through this tax system. Income Tax means Income Estimate, which helps the government to know the actual economic strength of a person. It is also a way to set up an economic standard for general people. It helps the Government to know the distribution of money among countrys people. According to ruling of Income Tax Act, 1961, any person whose salary from any source of income is more than the maximum limit of unchargeable amount will be liable to pay Income Tax. There is also a provision of deduction and exemptions in Income Tax, depending upon the type of assessee, source of income, residential status and investment in saving schemes.

CURRENT SYSTEM

Income Tax Return is an important part of Income Tax. It is the way by which an assessee pays his tax to the Government. As per the provisions of Income Tax Act, 1961, filing of Income Tax Return is a legal obligation of every individual whose income exceeds the maximum limit of non-taxable income for the full financial year .i.e. from 01 April to March 31 of the following year. For example, for the year 2008-2009 (which is also called the Assessment Year) the period is 01 April 2008 to March 31 2009. In case of salaried class assessee the particular financial year supported with the form 16 (the certificate for tax deducted at source), which is issued by the employer at the end of the financial year.

So, due to this reason every individual need to file an income tax return document manually to the Income Tax Department which helps the government to recognize the economic growth of our country.

LIMITATIONS OF THE CURRENT SYSTEM

For every individual, a firm or an organization filing income tax return is mandatory. But there are many people who are still unaware of the complex procedures, terms and conditions of income tax, also necessary required documents to be submitted while filing the income tax return. Therefore, filing income tax returns has always been a very tedious process in many peoples minds because of the following reasons: a) Forms are very long and complicated, we need to know and fill every minute detail to get the form verified. b) These forms are different for different type of

individual/assessee and also it consist of many subparts. c) For getting the return to be filed the individual need to stand in long queues and need to wait for long time. d) Since filing the return has limited amount of time, every time we need to find out the exact time limit and schedule for filing the returns. e) If timings for filing the income tax returns have ended we need to visit regional office again and again.

PROPOSED SYSTEM

Since filing of income tax return is a legal issue and it becomes a valid legal proof for the government as well as the individual, we need a computerized application for processing the filing system. The objective of the proposed system are to overcome the major limitations of the existing system thereby making the filing process convenient for the user (.i.e. tax authorities) in the Income Tax Department can handle the minute details related to each and every individual or a firm or a company which is liable to pay tax and to provide us with a systematic final income statement with taxable amount.

Advantages And Features :

1. The system provides information about necessary documents to be submitted depending upon the criteria such as type of assessee, his/her source of income, his/her type of service, residential status and investment in Savings Schemes and also specifies exact statements ( i.e. certificates) that are to be submitted which comes under the above category. 2. With improved computerization being involved in the system, errors and inconsistencies can be avoided.

3. Validation on data will ensure that only accurate, valid and complete data is stored in the data base. 4. User-friendliness of the system makes the processing and calculation easy. 5. This system will help the department to store and keep track of all records of individual (or a firm or a organization) and allows to maintain it. 6. Report generation will enable the Tax authorities management to analyze overall performance i.e. about the economic growth of all tax payers (i.e. individual, firm or a company). 7. The system allows us to retrieve the data more quickly and easily. 8. The system allows the Tax Authorities to track the exact TaxRefund status of Tax payers. 9. The documents are easily verified using this system. 10. The system provides us with a Token No. which can be called as Personal Identification No. of a Tax payer which helps to recognize the exact person filing the data and also links his details together into one. 11. This system provides us with two utilities : Calculator which is used to calculate the taxable amount and second, the Image Scanner, which is used for photo identification of the respective individual.

LIMITATIONS
1. The details of the taxpayers is done manually so updating and maintenance of data takes lot of time. 2. Manual dependency can slow down the work. 3. Human error can be caused. 4. Documents that are to be submitted should be authorized otherwise it leads to a tedious task for the tax authorities for preparing the Income Tax Return file.

GNATT CHART

This chart is used to allocate resources to activities; these resources are staff, hardware and software. This is a special type of Bar Chart, each bar represents an activity. The bars are drawn along a timeline. The length of the bar is proportional to the duration of the time planned. The shaded portion represents the estimated time taken to finish the task. The white portion shows the slack time which is the latest time by which the task has to be finished.
System Design

Data Process & Modeling

Investigating System Requirement s Project Search

November

December

January

February

March

Planned Date Actual Date Extended Date 10

E R DIAGRAM
E-R Stands for Entity Relationship. This step involves identifying the external entities and the entities in the system and understanding the relationship between them. The entities are represented in rectangular shape boxes and the relationship is shown in diamond shape boxes.
Location

Type

Age

Date Salary
Time

Region al
Staff

Section

Name

Customer
Gender
Amount

Files Return to

Income Tax Dept

Address Pays Tax

Refunds To

Select s

Fills

Forms
Assessment_ year

Form type

Form no

11

DATA FLOW DIAGRAM (DFD)

The DFD represents how the data will flow in the system when it is built. In this modeling, the major functions in the software are identified diagram shows how the data will flow through the different processes or functions. From the context level diagram, we examine the high level functional requirements of the system. So, main modules can be represented in level 1 of DFD using DFD notations. Thus, DFD is a hierarchical graphical model of the system that shows different processing activities of each processing module that the system performs and the data is interchanged among these functions. This whole unit is represented in the form of different levels (such as level 1, level 2, level 3 DFD) capturing the detailed structure of the system as perceived by the user.

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CONTEXT LEVEL DIAGRAM

The context level diagram is the most abstract data flow representation of the system. It represents the entire system as a single Bubble. The main function of the system is mentioned in the Bubble and the external entities with which this system interacts is represented. The incoming data and outgoing data are represented as arrows. It is an abstract Black Box representation of the entire system. The context level diagram is also called as level 0 DFD.

Individual / User

Finalized Report

IT Return System

13

CONTEXT ANALYSIS DIAGRAM

Does Payment Enters Details

Approves IT Return Doc. Prepares Doc.

Individual / Customer

Acknowledgement

IT Return System

Verify Doc.

Finalized IT Return

Refunds Excess Tax Deducted

Submits IT Return

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COMPLETE DFD
Stored in Enter 1.0 Customer Details Fills the Form 3.0 Income Tax Calc Get all Income details
2.0

Customer

Customer Details

Selection Process

Form Register

Taxable Amount
4.0

Does Payment of tax

Select pay mode

Payment Process

Income Tax Department

Refunds if excess tax deducted

Update

Customer
Payment Register

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FUNCTIONAL DECOMPOSITION

Each Bubble in the DFD represents the main functions, we decompose it further and at every step we design the next level of DFD as shown. This process is also called Exploding a Bubble. This process is carried out until no further decomposition of a bubble is possible. The examples are shown using both the notations: note that the numbering of the processes or bubbles is being done along side. This method helps in keeping track of the main process and its subprocesses. In case of the Bubbles the numbers are written outside the bubbles. The main processes have integers 1, 2, 3, etc.. When the bubble is decomposed then the sub-processes are numbered as 1.1, 1.1.1, 1.1.2, 1.1.3 and so on.

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0
IT Return Process

1.0
Customer Details

2.0
Income Tax Calculation

3.0
Selection Process

4.0
Payment Process

1.1
Personal Details

1.2
Official Details

1.3
Bank Details

4.1
Payment Mode

4.2
Tax Refund

4.3
Fringe Benefits

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DFD FRAGMENTATION
Each high level function is decomposed by the following steps: y The sub-functions for every high level functions is identified. y Data input to each of these sub-processes is identified. y Data output from each of these sub-processes is identified. y Interactions or data flow among these sub-processes is identified. This step is repeated till there can be no more subdivisions.
Customer Details are saved in

1.0 Customer Customer Details

Customer Database

Customer Details Income Details

2.0 Calculation of Income Tax

Including Deductions

Taxable Amount

3.0 Forms Database Selection Process

Selects form depending upon the type of Individual Appropriate Form

Pays Tax to Customer

4.0 Payment Process

IT Dept. Refunds Tax to Payment Database

Gets back excess tax

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All info. Stored in

SYSTEM FLOW CHART

System flowchart describes the data flow for a data processing system. A systems flowchart shows the key inputs and outputs associated with the program. The shape of the symbols indicates the types of input or output devices. It provides a logical diagram of how the system operates. It represents the flow of documents, the operations performed in data processing system. It also reflects the relationship between inputs, processing and outputs.

Enters

Stores Income

Customer Entry
Select

Customer Details
Official, personal, bank details

Details

Customer Income Details

Forms
Stored in

Income Tax Department

IT Calc
If needed

Salary Report
Refunds of tax to Updated records

Form Register

Payment
Excess tax to Does

Payment Details Payment Report

Final IT Return Statement

Customer
Refund Statement

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STRUCTURED CHART

The

structured

chart

represents

the

software

architecture or the various modules which makes up the system. It also shows the module dependency and the parameters that are passed among the different modules. The structured chart is drawn up by first drawing the root module and the nodules that it invokes. The structured chart is further refined by adding sub functions under each of the high level functional components. Many levels are added under the functions. This process is continued till all the bubbles in the DFD are represented in the structured chart.

Income Tax Department

Customer Details

Income Tax Calc

Forms

Payment Process

Personal Details

Official Details

Bank Details

Payment Mode

Tax Refund

Fringe Benefits

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MENU TREE
Data Entry Customer Details

Personal Bank Official

Select IT Calc Claim Doc Exit

Forms

Customer

Add View

IT Return Doc

Register Attach Other

Report

Salary Exempt Loan Bonus Refund IT Return

Utilities

Calc Scanner

About

Help
21

Exit

TABLE LISTING

Customer Table
Sr. No. Field Name 1. 2. 3. 4. 5. 6. 7. 8. 9. Cust_Id Name Gender Address Data type long int char char char Size 10 30 10 50 10 10 10 10 50

Years_of_service int Cust_Type Age Salary Details char int long int char

Income Tax Dept. Table

Sr. No. Field Name 1. 2. 3. 4. 5. 6. 7. Staff Regional_office Location Section Amount Date Time Data type long int Char Char Char long int Int Int Size 10 50 30 20 10 10 10

22

Form Table
Sr. No. Field Name 1. 2. 3. Form_No Form_type Data type char char Size 15 30 10

Assessment_year int

23

REPORT LISTING
 Salary Report  Exempt Report  Loan Report  Bonus Report  Refund Report  IT Return Report

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SALARY SHEET
Details of Salary : 1 a b c d e f 2 a b c d e f g 3
GROSS SALARY Basic Salary HRA DA Provident Fund Other Allowances Total(1a+1b+1c+1d+1e) OTHER INCOME Wages House Property Perquisite Productivity Linked Bonus Leave Encashment Annual Bonus Total(2a+2b+2c+2d+2e+2f) GROSS TOTAL INCOME
Rs.

180000

54000 96000 28800 36000 308400

Rs.

9000 24000 27000 18000 23000 55200 156200

Rs.

(1f + 2g)

464600

Certified that the Gross Income of Shri. Vinod Narayan Sharma, son of Shri. Narayan Lalitprasad Sharma for the financial year 2008-09 is Rs.464600 (in Words) Four Lakh Sixty Four Thousand Six Hundred Only.

The information stated above is true and correct based on the books of accounts, documents and other available records excluding deductions.

25

Date: Place: ________________________ Authorized Signatory (Department of Accounts)

Full Name : ________________________ Designation: ________________________

26

FORM LAYOUT

y Main Window

27

y Window for Entering Details of Customer

28

REFERENCES

y y y y y y y y

Website www.incometax.gov.in Website www.incometaxindia.gov.in Website www.incometaxefiling.gov.in Website www.india.gov.in Website www.filereturn.info.in Website www.etaxesindia.com Website www.finance.locateindia.com Indian Income Tax Guide

29