Can AI Help You Navigate The ITR Filing Maze?

AI is streamlining the tax filing process, providing personalised recommendations and automated document classification, but it has its limitations. Too much reliance can lead to errors and even legal hassles

- Sanjeev Sinha

Just a few years ago, even the thought of calculating our taxable income or figuring out exemptions and deductions while filing income tax returns (ITRS) could give sleepless nights to a majority of taxpayers. The intricacies of personal taxation in India have long been a challenge for individual taxpayers.

However, with AI stepping into the tax ecosystem, what was once a maze of paperwork and jargon is now becoming a streamlined process. From personalised tax-saving recommendations and automated document classification to intelligent alerts on compliance deadlines and AI-powered resolution of tax notices, technology is reshaping how individuals manage their taxes.

But AI-led processes have their limitations and risks. Over-reliance can create a new maze for you.

Making Personal Tax Simpler

AI has already begun simplifying personal taxation in India, though full automation and error-free assistance are still work in progress.

"While its full potential is still unfolding, AI is already playing a key role in enhancing efficiency, reducing errors, and improving the overall taxpayer experience," says Neeraj Agarwala, partner, Nangia & Co. LLP.

Ease of Filing ITR: The income tax portal now offers partially AI-driven pre-filled ITRs that pull in data from multiple sources, such as Form 26AS, the Annual Information Statement (AIS), and Tax Information Statement (TIS). While this feature is still evolving, it has increased transparency, gives a consolidated view and reduces manual errors.

"What was once a complex and time-consuming activity is now being simplified through automation and data extraction," says Santhosh Sivaraj, partner, global employer services, tax & regulatory services, BDO India.