Microsoft and your tax returns

Why not use open source software for tax returns?

Making assessees file returns in proprietary Microsoft Excel format is unfair



Statistics released by the Income Tax department show that by September 30, 2013, more than 17 million Indians filed individual tax returns online. That's a 41 per cent jump over the same period last year. E-filing is bound to increase in the years to come given that online filing of income tax is mandatory for a lot of us as per government guidelines.

As we all know, the process of e-filing taxes is now pretty easy. Download the relevant form from the income tax e-filing website, key in the details, click buttons to validate, calculate taxes and upload the generated returns file. One can also pay taxes online.

But there is a small problem. Something many of us probably know by now. The forms are in Microsoft Excel file format.

The Excel “macro” feature used in tax forms released by the Income Tax department means that free software — such as OpenOffice, LibreOffice, etc. that otherwise support Microsoft Excel files, not to mention cheaper alternatives from Microsoft itself, like MS Office Starter Edition — cannot be used on those forms.

In short, any tax payer trying to file income tax online in India has a fairly expensive dependency on Microsoft Excel and Microsoft Windows.

It helps if one has access to the software at one’s place of work or at a friend’s place.

Also, software piracy is a reality in India. But that is neither a suggested option nor part of the calculation in any case. So, this is a classic case of single-vendor dependency. The question is, why?

Notable numbers

At present, each individual needs to shell out close to Rs 5,500 to have a legal copy of the cheapest version from Microsoft that might do the work— Microsoft Home & Student Edition. Buying MS Excel alone would be costlier at around Rs 6,800.

If 10 per cent of the 17 million online tax filers purchased legal MS Office software this year to file tax returns (of course, the software will have other uses too), the corresponding revenue for Microsoft would be about Rs 900 crore (nearly $145 million).

Microsoft also has an online option named Office 365, which could be leased for a monthly amount of Rs 420 that the user can access online.

Assuming 50 per cent of the online tax filers as per the figures quoted earlier, who otherwise do not have MS Office software, but opted to lease Office 365 for a month in order to finish off tax filing, we are looking at around Rs 350 crore (approximately $56 million) for a month.

This needs to make us think. Why choose a proprietary format for tax returns, tying taxpayers to a single platform and vendor with assured business running into hundreds of millions, when multiple free options, including at least one ratified by Government agencies, are available?

More so when other documents such as the ITR-V form as well as the acknowledgement for receipt of signed copies of ITR-V at the Income tax processing centre are still in other free-to-use formats?

A look at the past

In 2007, members of the International Standards Organisation (ISO) voted on whether to approve the OOXML (Office Open XML) format proposed by Microsoft (used in MS Office) as a standard for file formats.

A rival format — ODF (Open Document Format) used in free software such as OpenOffice, LibreOffice, etc. and supported by the Open Source community as well as a number of companies such as IBM, Sun and Red Hat — was already ratified as a standard in 2006.

With countries expected to vote, hectic lobbying followed, with each side accusing the other of trying to influence the vote. Microsoft OOXML failed to win the requisite votes as per ISO, in 2007. India voted against OOXML.

In 2008, OOXML was again submitted for a fast track approval. As a participating member of ISO, India was represented by the Bureau of Indian Standards (BIS).

India’s position was coordinated by a committee of BIS with members from government, academia and industry (which also included Microsoft India).

Within the committee, the votes in favour of Microsoft OOXML were from those who represented the IT industry — Nasscom, Microsoft India, TCS, Infosys and Wipro. India voted against Microsoft OOXML again in 2008.

However, eventually, in the widely criticised vote, Microsoft-backed OOXML was ratified as an ISO standard, overriding an appeal filed by India, Brazil and others.

Back to the present

The Income tax authorities should give at least another, free option — PDF, ODF or any other — so that it could benefit the masses hugely. The Indian taxpayer should be able to file his/her returns without dependency on specific pieces of software to be purchased from one vendor, in this case Microsoft Corporation.

The case for ODF is especially strong, as it is an ISO standard, free, ratified by BIS and works on many platforms, including MS Windows and Linux operating systems. No government agency should have any difficulty in adopting something like ODF.

By end of November 2013, the published income tax e-filing figure has climbed to almost 20 million. So, there should be no doubt as to which way things are headed in the days to come.

The Income Tax department e-filing website now offers a couple of other forms for download as packaged Microsoft Windows executable files. India, with fairly low awareness and enforcement of information security practices, is already a major victim of computer malware and crime.

Putting executable content that might be shared might not be a good idea. Moreover, the vendor dependency would continue.

(The author is from the Information Technology sector. Views are personal)

Published on December 29, 2013
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