How India's fintech revolution reveals why tax advisory still needs the human heart

The continued upward trajectory of digital payments in India is clearly demonstrated by the Unified Payments Interface (UPI) processing over Rs 23.6 lakh crore in transactions in April 2025. This volume reflects India’s growing comfort with digital payments as well as expectations that technology, particularly AI, will seamlessly manage even the most intricate aspects of our personal finances. AI has indeed proven its mettle. It is able to scan documents, reconcile data, spot inconsistencies, and recommend deductions with impeccable accuracy and speed. However, here's what I've learned from years in fintech: even if AI can master the structure of tax compliance, it struggles profoundly with nuance.

Unlike simple compliance, tax planning is deeply personal. It depends on your financial goals, life stages, and changing circumstances. When a young professional in Bengaluru is navigating stock options, foreign income, and multiple investment instruments simultaneously, an algorithm can easily identify mismatches or suggest standard deductions. But what it won't do is ask the critical questions: Are you planning to buy a house in the coming year? Will exercising those stock options push you into a higher tax bracket just when you need liquidity for your wedding? These kinds of strategic inquiries require genuine understanding, human intuition, and forward-thinking—qualities that AI has yet to replicate.

This is where a human advisor becomes indispensable. Even though AI is incredible at managing the mechanics of tax compliance, human intelligence excels at managing the context. Technology can process and flag the inconsistencies, but a seasoned advisor understands their real-life implications. They can craft a strategy that fits not only your financial profile but also your personal story, your family obligations, and your long-term aspirations.

Despite India's impressive digitisation journey, tax engagement remains surprisingly and problematically low. In FY 2024, only around 6.5 crore Indians filed income tax returns, which is barely 4.45% of the population. This figure reflects hesitation, confusion, and a lack of confidence. The language of our tax systems is complex and the consequences of errors are high, which is why filing taxes is an intimidating but important task. While digital platforms efficiently tell users what forms to fill and what boxes to check, human advisors serve a fundamentally different purpose—they explain why these decisions matter and how to think about them in the context of your broader life plans. They transform anxiety into understanding, compliance into strategy.

Tax advisory provides the most effective outcomes when people embrace technology and work collaboratively. AI should be given all the grunt work—all those time-consuming, rules-based tasks—freeing up human advisors to focus on more intelligence-based tasks that call for insight, experience, and foresight. Anticipating any financial situation is in the advisors’ DNA. They help their clients structure their respective incomes around changing life stages, interpret shifting regulations, and plan not only for the coming years but also for the decades that will follow.

The need for human involvement is beyond question, and it’s growing. As per a 2023 report by Bain & Company, more than 70% of Indian consumers are sceptical about using technology for major financial decisions. They prefer a human guide. This preference reflects the complexity of choices and the importance of judgment. As tax systems are evolving with newer regimes, faceless assessments, and greater scrutiny, what people need most is someone who can connect the dots between law, life, and long-term well-being.

When approached with care and expertise, tax planning transforms from a burdensome obligation into a powerful tool for wealth creation and protection. Trusted advisors don't just help clients save money in the immediate term—they help build lasting financial security. By offering clarity during life transitions and providing insights during periods of uncertainty, they enable people to plan confidently for their futures, protect family wealth across generations, and make decisions that align with their deepest values, not just their immediate returns.

After all, financial decisions are rarely just financial. They are influenced by emotional and personal events that no machine can fully comprehend. Health issues, company layoffs, a child’s education—these aren’t just numbers on a ledger. These are moments that require empathy, which only a human can provide.

While AI has revolutionised the tax system by introducing unprecedented speed, precision, and convenience, it certainly cannot replace the human element that makes financial planning truly effective. The future of tax advisory isn't heading toward full automation — it's evolving toward intelligent collaboration, featuring enhanced AI capabilities working alongside humans who understand how to leverage this technology thoughtfully. In this optimal model, AI efficiently handles the computational heavy-lifting while experienced tax advisors provide the essential human touch that builds genuine confidence among taxpayers. This combination empowers people to manage their income and tax obligations with remarkable clarity and lasting peace of mind—exactly what India's growing economy and aspirational population deserves. This is sure to build confidence among taxpayers, helping them manage their income and taxes with clarity and peace of mind.

The author is Co-Founder & CEO of Prosperr.io