Here's the part of tax filing nobody puts in the ads. Before you touch a form, you sit down with a year of bank statements and a spreadsheet and go line by line, deciding what each transaction was. Salary. Transfer. That refund from Amazon. The Rs 40,000 your brother sent for a flight. Advance tax. Interest. On it goes, for a few hundred rows.
For a salaried person with one account, it's an afternoon. For anyone with a side income, more than one account, or a freelance practice, it's a proper piece of work, and it's the same work every single year.
Why we still do this by hand
People assume "tax software" means the form-filling part: pick your ITR, type in the numbers, submit. The e-filing portal already does that part well enough. The real labour sits upstream, in producing the numbers you type.
A spreadsheet doesn't help with that. It just gives you somewhere to do the sorting manually. You're still the one reading "NEFT-CR-HDFC-XXXXX" and deciding whether it was a client paying an invoice or a landlord returning a deposit.
What the AI actually does
Software has started to close this gap. ITRSimple takes a bank statement and produces the ITR computation, on your desktop or in a browser. You import a statement, Excel or CSV, from any of the major Indian banks, and an AI engine that reads and classifies every transaction sorts each line: income, expense, inter-account transfer, loan, advance tax, self-assessment tax, interest. The ones it can't call with confidence go to a review queue, so you check a short list rather than the entire statement.
From there the computation is automatic: profit and loss where it applies, tax under both the old and new regime, and a full ITR-1, ITR-2 or ITR-4 (44ADA) working depending on what kind of income you have. The numbers stay linked to the transactions they came from, so if a figure looks wrong you can trace it straight back.
What the classifier gets right, and where you still look
To be straight about it: the engine is good at the patterns that repeat. Salary credits, recognised UPI merchants, EMI debits, tax challans, interest postings, transfers between your own accounts. Those it handles without help.
Where it asks for a human is the genuinely ambiguous stuff: a large one-off credit from an individual (gift? loan? repayment?), a payment to a name it hasn't seen, a client who pays from three different accounts. That's what the review queue is for, and it's usually a page or two, not the whole year. The point isn't that the software removes judgment. It's that it stops you spending judgment on the 500 lines that never needed any.
Getting the statement out of your bank
The one bit of prep worth doing carefully is the export, because every bank buries it somewhere slightly different and the format matters.
- Ask for Excel or CSV, not PDF. A PDF has to be scraped; a spreadsheet imports cleanly. Most net-banking portals offer both, usually under "statement" or "account activity".
- Pull the full financial year in one file if the portal lets you, April to March. Some banks cap the export at 6 or 12 months, in which case take two files and import both.
- Every account a client payment or any income has ever touched. A forgotten savings account with three FD interest credits is exactly the sort of thing that turns up in a notice a year later.
After the first import the column mapping is saved, so the same bank is a single step next year.
The offline part people skip past
Most tax tools are cloud by default. You upload, it processes on their server, and the data sits there. For a bank statement, which is a complete record of who paid you, when and how much, that's worth a second thought. Who has access, and what happens to it once the season is over?
An offline-first tool keeps all of it on your device. Import, classification, computation: local. Nothing syncs. It runs with the wifi off. For anyone who has ever paused before uploading a statement to a form, that's the feature that outweighs the rest.
Who this is for
- Salaried people with some interest income or a house property (ITR-1) who want it computed properly without paying someone for a simple return
- Freelancers and consultants on presumptive taxation (ITR-4, 44ADA) with client payments and TDS spread across the year, there's a separate guide to filing ITR-4 under Section 44ADA if that's you
- People with more than one property or other income (ITR-2) who need a fuller computation than a salary return
- Anyone who would simply rather not hand a year of transactions to a website
Trying it without committing
You don't have to move your whole process to test the idea. The free plan gives you one client and one financial year, full engine, no transaction limit. Import a real statement, see how much the classifier got right, and decide from there whether it's worth using for the actual filing.
The shift that's actually happening
Indian tax software has spent years improving the form: more ITR types, cleaner e-filing, better validation. Useful, but incremental. The more interesting change is one step earlier, in how a raw statement becomes the figures on the return at all. Automate that, and do it without shipping your data to a server, and you've dealt with the time cost and the privacy cost together. That's a reasonable guess at where this category goes next. There's more on how the desktop and online versions compare on the home page, and the FAQ covers the common questions on formats and what's supported.