Benjamin Franklin had famously said, “In this world, nothing can be said to be certain, except death and taxes.” Had he been around he is sure to have added a caveat — “AI is of little use after death, but do not blindly employ artificial intelligence while filing your tax returns.”

Even if AI is being used by the military to operate drones and replace programmers, the technology cannot be trusted — at least not yet — to get every small detail right.

Nilanjan Dey, a partner at Wishlist Capital, told The Telegraph that while “AI is not quite likely to be erroneous” when it comes to simple deductions or house rent allowance exemptions unless capital gains computations are very complicated, the technology will “perhaps not be the perfect solution for disputes, claims and arbitrations, which are matters that need human acumen”.

Not all AI models are created equal. Many tax experts have been using proprietary software for years, ensuring they work alongside the most recent tax rules with human review built into them.

A general chatbot could be good at predicting the next word in a sequence, but such tools do not always understand the complicated relationships shared among the pieces of information they process.

When dealing with complicated topics, it is advisable to use a “thinking” model, which is available within leading chatbots. These models offer step-by-step solutions and show how the reasoning process unfolds. However, the free versions of many chatbots do not offer this model by default and usually require the user to proceed with the faster model.

“I don’t think I would be comfortable sharing financial information with AI tools at the moment. If the IT department launches something, I would likely consider it,” says Varun Krishnan, a Chennai-based entrepreneur. He adds, “I think human oversight will still be required in the Indian context, especially for businesses, but I see AI becoming popular for personal tax filing in the near future.”

With the tax filing season upon us, many will look for shortcuts for efficiency, even if it means not paying a “finance guy” a certain amount to file taxes on their behalf. Income tax returns can be complicated, which makes them often unsuited for a chatbot.

Furthermore, if the chatbot’s answers still need to be scrutinised by another expert, the entire exercise becomes pointless. Personal information, such as your PAN and financial statements, should remain private, especially in a world where data collection and breaches are constant concerns.

“There is considerable risk in sharing critical data such as a PAN and letting AI-driven platforms handle the same. This applies especially to Aadhaar information, which is so very vital in the current context. Processes that are handled or hosted in other countries should be screened specifically before they can be trusted. In my view, common taxpayers will be unaware of this risk, so I would particularly advise them to be careful,” says Dey.

Krishnan advises users to “use these tools in a private/incognito mode and avoid sharing data for training purposes.”

Most AI models are improving by leaps and bounds but are also known to hallucinate. Making a mistake with tax returns while using AI will not validate the “AI-did-it” excuse. There is also confusion regarding the relevance of the data an AI model might use, as the data used to train a model can sometimes be months old. Some models now have browsing or retrieval capabilities. It helps to add tools on top of chatbots, such as a programme that could validate whether a tax return holds good.

“AI will evolve as all technology does. New tools will arrive, and people will realise they can use these tools to their advantage. A large section of the public will not bother much about privacy or security, at least initially,” says Dey.

He adds, “Yet, I do see a continued role for human capability and skill. That will, I am afraid, be reserved for those at the top of the food chain. There will be premiumisation. Human inputs will be essential for tax compliance and governance for professionals and high-income earners. Also, corporate tax laws are likely to remain challenging, going well beyond the mere filing of returns. Tax lawyers will have an edge here.”