A Clear Case of AI Innovation
Filing taxes is no fun—anyone who’s ever done it knows so. So, when minister of state for finance, Pankaj Chaudhary, informed Parliament last year that more people are filing returns, with 6.68% of India’s population doing so in 2023–24, you know something has changed. A large part of that credit goes to platforms like Clear, which have turned tax filing from a dreaded chore to a few simple taps on your screen. Clear, formerly known as ClearTax, is transforming tax filing and compliance in India through the use of AI. With tools like its AI Copilot and WhatsApp-based assistant, Clear simplifies complex processes for both individuals and enterprises, handling multilingual support, document processing, and intelligent audits. A WhatsApp-based tax filing agent of Clear, specifically designed to simplify tax compliance for India’s vast gig workforce, is set to generate $1 million in annual recurring revenue (ARR) this year, co-founder Ankit Solanki revealed in a conversation with AIM. The agent is capable of understanding multiple languages, managing complex states, and interpreting multimodal inputs, including text, images and voice notes. “Our WhatsApp-filing agent seamlessly managed a complex 16-step tax filing workflow, resulting in rapid user adoption and a projected $1 million ARR within its second year,” he said. Notably, the feature was launched in mid-2024. “We needed to handle more than 1,000 states, multiple languages, and multimodal inputs. We achieved this by equipping a network of four bots with 10 tools. The product went viral, forcing us to scramble for additional token bandwidth overnight,” he recalled. Solanki added that the company extensively uses generative AI models or large language models (LLMs) in customer-facing tools and backend processes across both B2B and B2C operations. One of its flagship consumer-facing initiatives is an AI Copilot, Ask Neha, integrated directly into its DIY tax filing product. The assistant offers immediate help through conversational interaction and intelligent features like deep-link navigation and ticket creation. On the backend, Clear’s Document AI replaces traditional optical character recognition (OCR) workflows with modern multimodal LLMs to extract structured data from documents like invoices and tax notices. Solanki noted that the company also uses GenAI in its Tax Notice Manager to analyse compliance documents and recommend actionable responses. In its enterprise business, Clear extensively applies AI across document digitisation via Document AI, financial transaction reconciliation through Recon, and intelligent audits via Transaction Intelligence. “Our Recon product, trained on historical client data, improved transaction matching by 7%, delivering substantial cost savings for our business customers,” Solanki said. Impact of AI Commenting on AI’s role in automation, Solanki said it has dramatically streamlined processes that once required heavy manual effort. For instance, AI-powered document processing now enables automatic classification, data extraction, and direct population of user forms, transforming tedious, manual workflows into seamless digital experiences. “Our AI models have significantly improved both accuracy and speed in reconciliation, directly resulting in cost and labour savings. Similarly, AI-based intelligent audits, such as assessing ITC eligibility or TDS categorisation, reduce manual oversight and boost client confidence in compliance,” he explained. The company also uses past user interactions and transaction histories to enable smart categorisation and risk assessment for financial transactions, such as determining ITC eligibility, assigning TDS sections, or flagging Reverse Charge Mechanism (RCM) cases. “Our AI-powered alerts and recommendations offer clients personalised, actionable guidance and peace of mind in compliance workflows,” he added. Solanki confirmed that AI has delivered measurable business value and said the WhatsApp-based tax filing agent would not have been possible without it. “This multilingual, multimodal AI-driven product achieved rapid adoption. Moreover, our AI-enhanced reconciliation system, with a 7% boost in transactional linking, led to direct cost and efficiency gains for enterprise clients,” he noted. Data Handling Clear deploys AI to extract structure and insights from large volumes of scanned, unstructured documents, enabling smarter classification, faster reconciliations, and more accurate compliance analyses. “By leveraging historical transaction data, our predictive AI models enhance automation and accuracy in categorisation and compliance checks—providing clients with strategic insights and direct cost savings,” Solanki explained. To ensure data privacy and compliance, the company employs a multi-pronged approach: strict access controls, robust data handling protocols, removal or masking of personally identifiable information (PII) before any GenAI API calls, and client-specific data segmentation for training models. It also relies on hosted LLMs from trusted cloud providers, ensuring industry-standard privacy and regulatory compliance. Tech Behind the Solutions Source: Clear Solanki shared that most of Clear’s AI services are Python-based FastAPI applications hosted in Docker containers. For classical ML workflows, it primarily uses PyTorch. Generative AI agents rely heavily on the LlamaIndex framework for retrieval-augmented generation (RAG), function calling, and structured data extraction. Regarding partnerships, Solanki said all impactful AI research and product development initiatives are currently driven in-house. “We primarily use commercially available APIs and tools from third-party providers, though we’re actively working toward building customised in-house LLMs tailored to finance and compliance,” he added. Encouraged by early success with generative AI agents, Clear is pursuing ambitious projects such as the Integration Agent, which aims to integrate ERP (enterprise resource planning) and accounting systems within a day, and the Supply Chain Agent, which autonomously builds accounts payable workflows from process documents and client interactions. “We also aim to build a specialised Tax and Compliance Expert LLM by embedding Clear’s decade-long domain knowledge into flexible and reliable solutions,” he said. The Industry When asked about AI’s role in shaping India’s fintech and compliance landscape over the next five years, Solanki said, “We believe AI today is akin to the internet in the 1990s—it will redefine everything. It will act as a domain expert interpreting complex regulations, an assistant automating routine tasks, and a safeguard against costly errors. It will also transform product engineering, enrich multilingual user experiences, and democratise access to sophisticated compliance processes.” He predicted that while AI will automate and replace a significant share of traditional accounting tasks, functions requiring human judgment, strategic insight, and direct engagement will persist, with AI serving as a powerful augmentation layer to human expertise.
Clear’s AI-driven WhatsApp tax agent simplifies compliance, boosts efficiency, and is projected to generate $1 million ARR by this year.
Clear’s AI-driven WhatsApp tax agent simplifies compliance, boosts efficiency, and is projected to generate $1 million ARR by this year.
["AI (Artificial Intelligence)", "cleartax", "tax filing"]
["GenAI", "tax filing", "cleartax", "AI", "PyTorch", "ML", "LlamaIndex", "RAG", "Aim", "FastAPI", "generative AI", "multimodal AI", "AI (Artificial Intelligence)"]
["AI", "ML", "generative AI", "GenAI", "multimodal AI", "LlamaIndex", "Aim", "PyTorch", "FastAPI", "RAG"]
Bala is a journalist covering Indian tech companies and startups from Bengaluru.