India's Tax Filing Tools Face AI Risks and Growing Free Platform Options

Tax experts caution Indian taxpayers against using public AI chatbots to prepare income‑tax returns, warning that such tools lack a fixed compliance framework, can produce inconsistent calculations and expose sensitive documents to data‑leak risks. ClearTax CEO Archit Gupta said professionals have faced internal corporate actions, including terminations, after inadvertently uploading Form 16 and salary slips to open AI platforms. Deloitte India partner Tarun Garg added that AI should serve only as a supportive assistant for explaining tax terms and organising documents, not as a filing engine.

At the same time, the market for free DIY tax‑filing software in India is expanding. Major players such as the official Income Tax Department portal, ClearTax, TaxBuddy, myITreturn, EZTax, Quicko, and KoinX offer guided filing, Form 16 import, refund tracking and specialised support for investors, crypto users and small businesses. Premium versions add deeper review for capital gains, business income and notice management. The rise of these platforms aims to simplify compliance for salaried employees, freelancers and small enterprises while reducing reliance on professional consultants.