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1

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

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2

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 - Roll No. 292.Ms. Namrita Sundarraj - Roll No. 34

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3

INDEX

Sr. No. Contents Page No.

1. Organization Overview 4

2. Current System 5

y Limitations of Current System 63. Proposed System 7

y Advantages and Features 7y Limitations 9

4. Gnatt Chart 10

5. E-R Diagram 11

6. Data Flow Diagram(DFD) 12

y Context Level Diagram 13y Context Analysis Diagram 14y Complete DFD 15

7. Functional Decomposition 16

8. DFD Fragmentation 18

9. System Flowchart 19

10. Structured Chart 20

11. Menu Tree 21

y Table Listing 22y Report Listing 24

12. Form Layout 27

13. References 29

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4

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.

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5

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 A pril 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 A pril 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.

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6

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 fillevery minute detail to get the form verified.

b)These forms are different for different type ofindividual/assessee and also it consist of many subparts.

c)For getting the return to be filed the individual need to stand inlong queues and need to wait for long time.

d)Since filing the return has limited amount of time, every time weneed 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 needto visit regional office again and again.

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7

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 besubmitted which comes under the above category.

2.With improved computerization being involved in the system,errors and inconsistencies can be avoided.

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3.Validation on data will ensure that only accurate, valid andcomplete data is stored in the data base.

4.User-friendliness of the system makes the processing andcalculation easy.

5.This system will help the department to store and keep track ofall records of individual (or a firm or a organization) and allows

to maintain it.

6.Report generation will enable the Tax authorities managementto 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 andeasily.

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.

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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.

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10

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.

Project

Search

Investigating

System

Requirement

Data

Process &

Modeling

System

Design

December February MarchJanuaryNovember

Actual Date

Extended Date

Planned Date

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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.

Pays

Amount

Refunds

To

Select

Forms

Fills

Form noForm

type

Assessment_

year

Customer

Type Age Salary

Name

Gender

Address

Files

Return

to

Income Tax

Dept

Time

Date

Staff

Region

Location

Section

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12

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.

IT Return

System

Individual

/ User

Finalized

Report

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CONTEXT ANALYSIS DIAGRAM

Individual /

Customer

Finalized

IT Return

IT

Return

System

Enters Details Pre ares Doc.

AcknowledgementVerify Doc.

Does Pa ment

Refunds Excess

Tax Deducted

Approves IT

Return Doc.

Submits IT

Return

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COMPLETE DFD

Customer Enter 1.0

Customer

Details

Stored in

Customer Details

2.0

Selection

Process

Fills the Form

3.0

Income Tax

Calc

Get all

Income

details

4.0

Payment

Process

Does

Payment

of tax

Income Tax

Department

Update

Refunds if excess tax

deducted

Select pay mode

Form Register

Taxable Amount

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 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.

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0

IT Return

Process

1.0

Customer

Detail

2.0

Income Tax

Calculation

3.0

Selection

Process

4.0

Payment

Process

1.1

PersonalDetails

1.2

OfficialDetails

1.3

BankDetails

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.

1.0

Customer DetailsCustomer

Customer

Database

Customer Details

are saved in

Customer

DetailsTaxableAmount

2.0

Calculation of

Income TaxIncome

Details

Including

Deductions

Forms

Database

Appropriate

Form

3.0

Selection

Process

Selects form

depending

upon the type

of Individual

Customer

Payment

Database

4.0

Payment Process

IT Dept.

Pays Tax to

Refunds Tax toGets back excess tax

All info. Stored in

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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 symbolsindicates 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

Details

Select

Stored in

Official,

personal,

bank details

If needed

Updated

recordsof tax toRefunds

Excess

tax toDoes

Customer

Entry

Forms

Form

Re ister

Customer

Details

Customer

Income Details

Income Tax

Department

IT Calc

Salary

Report

Payment

Details

Payment

Report

Payment

CustomerFinal ITReturn

Statement

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

Fringe

Benefits

Tax

Refund

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MENU TREE

Data Entry

Official

Customer

DetailsBank

Personal

Select Forms

IT Calc

Claim Doc

Exit

Add

Register

View

Customer

IT Return

Doc

Attach

Other

Report Salary

Exempt

Loan

Bonus

Refund

IT Return

Utilities Calc

Scanner

A bout Help

Exit

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TABLE LISTING

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_service int 106. 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

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Form Table

Sr. No. Field Name Data type Size1. 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

f Total(1a+1b+1c+1d+1e) 308400

2 OTHER INCOME Rs.

a Wages 9000b 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) FourLakh 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.

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Date:

Place:

________________________

Authorized Signatory

(Department ofAccounts)

Full Name : ________________________

Designation: ________________________

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FORM LAYOUT

yMain Window

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y Window for Entering Details of Customer

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REFERENCES

y Website www.incometax.gov.iny Website www.incometaxindia.gov.iny Website www.incometaxefiling.gov.iny Website www.india.gov.iny Website www.filereturn.info.iny Website www.etaxesindia.comy Website www.finance.locateindia.comy Indian Income Tax Guide