At Big 4 firms, AI is starting to reshape the tax profession

Mumbai: As the Big Four’s Indian arms race to roll out artificial intelligence, tax is emerging as the first major battleground as companies reimagine workflows in a profession where large teams of consultants have long helped clients navigate the complex regulatory maze of GST, direct taxes, customs duties, transfer pricing and litigation.

Adoption of AI is high among companies as it is increasingly used by tax advisors to perform routine, preparation and research-intensive work.

At PwC India, around 1,500 employees generate more than 10,000 AI queries a day. At Deloitte India, close to half of the 5,000-member tax team uses dedicated AI platforms in their daily work, while at EY India, over 75% of the 6,500 tax professionals regularly use AI tools in their daily work.

“We’ve gone through over 1.3 million inquiries in the system this year,” said Bhavin Shah, partner at Price Waterhouse & Co. “The scale at which tax professionals are using AI in-house is significant and we are seeing query volumes increasing by approximately 30% every 45 days.”

Over the last 12 months, all the top firms have been working feverishly to build tightly controlled AI ecosystems trained on years of proprietary tax information, historical insights and the best legal databases, and seek to incorporate them into the daily workflows of tax advisors on both the compliance and advisory sides of the business.
“Generative AI is probabilistic, while tax is fundamentally deterministic,” said Sameer Gupta, tax leader, EY India. “Clients ultimately need a definitive answer about tax liability, merger structures or litigation situations. We need to fill that gap.”
Experts say few markets offer a better test case for AI in tax than India. Tax is a market with large transaction volumes, frequent regulatory updates, and a high volume of litigation, making it a function that not only involves large amounts of data but is also heavily dependent on interpretation.
“In India, a single transaction can trigger GST, customs, transfer pricing and capital gains consequences simultaneously,” Gupta said. “You also have to understand how courts and tribunals may interpret a position. The challenge is not just to understand the facts, but to reframe and develop them through the right questions.” Thanks to artificial intelligence, research that used to take several days can now be completed in minutes or hours. Tax officers can create more comprehensive initial drafts, while partners can spend more time working on interpretations, identifying risks and applying judgment.

“AI does not replace expertise; it augments it. The combination of deep domain knowledge and AI-powered intelligence enables our consultants to deliver sharper insights, faster turnaround times and more tailored results for clients,” said Gokul Chaudhri, Head of Tax, Deloitte South Asia.

With AI deployment, the traditional consultancy model of scaling revenue by adding junior staff for research, drafting and compliance work, a structure long followed in the tax business, is starting to change as AI automates large parts of this pyramid.

“The expectation now is to deliver significantly higher revenue growth without a commensurate increase in headcount,” Shah said. “The pyramid structure is already starting to change.”