T.Z.A.S.P.

MANDAL’S

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

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 T.Z.A.S.P.MANDAL’S

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 - Roll No. 29
2. Ms. Namrita Sundarraj - Roll No. 34

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 INDEX

Sr. No. Contents Page No.

1. Organization Overview 4
2. Current System 5
 Limitations of Current System 6
3. Proposed System 7
 Advantages and Features 7
 Limitations 9
4. Gnatt Chart 10
5. E-R Diagram 11
6. Data Flow Diagram(DFD) 12
 Context Level Diagram 13
 Context Analysis Diagram 14
 Complete DFD 15
7. Functional Decomposition 16
8. DFD Fragmentation 18
9. System Flowchart 19
10. Structured Chart 20
11. Menu Tree 21
 Table Listing 22
 Report Listing 24
12. Form Layout 27
13. References 29

ORGANIZATION OVERVIEW

3
 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 (HUF’s), 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 country’s
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

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 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

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 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 people’s 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
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 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.

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 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 Tax-
Refund 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

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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

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 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

vestigating System Requirements

Project Search

November December January February March

Planned Date
Actual Date

E – R DIAGRAM
Extended Date

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 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
Regional Office
Type Age Date Section
Salary
Time
Staff

Name
Files Return to

Customer Income Tax Dept

Gender

Amount

Address
Pays Tax

Refunds To

Selects

Fills

Forms
Assessment_ year

Form type Form no

DATA FLOW DIAGRAM (DFD)

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 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.

CONTEXT LEVEL DIAGRAM

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 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.

Finalized Report
Individual
/ User

IT Return System

CONTEXT ANALYSIS DIAGRAM

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 Approves IT Return Doc.
Does Payment

Enters Details Prepares Doc.

IT Return System
Individual / Customer Finalized IT Return
Verify Doc.
Acknowledgement

Refunds Excess Tax Deducted Submits IT Return

COMPLETE DFD

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 Stored in

1.0
Enter Customer Details
Customer
Customer Details

Fills the Form

3.0 2.0
Income Tax Calc Get all
Selection Process
Form Register
Income details

Taxable Amount
4.0 Does Payment
Payment Process Income Tax Department
Select pay mode of tax

Refunds if excess tax deducted

Update
Customer

Payment Register

FUNCTIONAL DECOMPOSITION

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 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 sub-
processes. 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.

0
IT Return Process 16
 1.0 2.0 3.0 4.0
Customer Details Income Tax Calculation Selection Process Payment Process

1.1 1.2 1.3

Personal DetailsOfficial Details Bank Details

4.1 4.2 4.3

Payment Mode Tax Refund Fringe Benefits

DFD FRAGMENTATION
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 Each high level function is decomposed by the following steps:

 The sub-functions for every high level functions is identified.

 Data input to each of these sub-processes is identified.
 Data output from each of these sub-processes is identified.
 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 Details Customer Database
Customer

Customer Details Including Deductions

2.0
Calculation of Income Tax Taxable Amount

Income Details

Selects form depending upon the type of Individual

3.0
Forms Database Selection Process Appropriate Form

Pays Tax to 4.0

Customer Payment Process IT Dept.

Refunds Tax to
Gets back excess tax
SYSTEM FLOW CHART Payment Database
All info. Stored in

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 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.

Stores Income
Enters Customer Income Details
Customer Entry Customer Details
Details

Official, personal, bank details

Select

Income Tax Department IT Calc

Forms
If needed
Salary Report
Stored in

Updated records
Refunds of tax to
Form Register
Payment Details
Payment
Payment Report
Excess tax to
Does

Final IT Return Statement

Customer

Refund Statement

STRUCTURED CHART

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 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 DetailsIncome Tax Calc Forms Payment Process

Official Details
Personal Details Bank DetailsPayment ModeTax RefundFringe Benefits
MENU TREE

Data Entry Customer Details Personal

Bank
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Official
 Select Forms

IT Calc

Claim Doc

Exit

Customer
Add

View

IT Return Doc
Register

Attach

Other

Report Salary

Exempt

Loan

Bonus

Refund

IT Return

Utilities Calc

Scanner

About Help

Exit

TABLE LISTING

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 Customer Table

Sr. No. Field Name Data type Size

1. Cust_Id long int 10
2. Name char 30
3. Gender char 10
4. Address char 50
5. Years_of_servic int 10
e
6. Cust_Type char 10
7. Age int 10
8. Salary long int 10
9. Details char 50

Income Tax Dept. Table

Sr. No. Field Name Data type Size

1. Staff long int 10
2. Regional_office Char 50
3. Location Char 30
4. Section Char 20
5. Amount long int 10
6. Date Int 10
7. Time Int 10

Form Table

Sr. No. Field Name Data type Size

1. Form_No char 15
2. Form_type char 30
3. Assessment_year int 10

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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 GROSS SALARY Rs.

a Basic Salary 180000

b HRA 54000
c DA 96000
d Provident Fund 28800
e Other Allowances 36000

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 f Total(1a+1b+1c+1d+1e) 308400
2 OTHER INCOME Rs.
a Wages 9000
b House Property 24000
c Perquisite 27000
d Productivity Linked Bonus 18000
e Leave Encashment 23000
f Annual Bonus 55200
g Total(2a+2b+2c+2d+2e+2f) 156200
3 GROSS TOTAL INCOME 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.

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

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Full Name : ________________________
Designation: ________________________

FORM LAYOUT

 Main Window

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 Window for Entering Details of Customer

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REFERENCES

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 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

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