The increasing integration of Artificial Intelligence (AI) into higher education has transformed the ways in which students acquire knowledge, complete academic tasks, and develop essential learning skills. Despite the growing use of AI-powered applications, empirical evidence on undergraduate students' awareness and educational use of these technologies in Indian central universities remains limited. This study examined the awareness and use of AI tools in relation to academic skill development among undergraduate students at Guru Ghasidas Vishwavidyalaya, Bilaspur, Chhattisgarh. A quantitative descriptive survey design was adopted, and data were collected from 138 undergraduate students selected through stratified random sampling from the Arts, Science, and Commerce streams. A structured questionnaire developed by the researchers was used for data collection. The data were analysed using descriptive statistics, independent-samples t-test, one-way ANOVA, and Pearson's correlation. The findings indicate that students possess a high level of awareness of AI tools and primarily use applications such as ChatGPT and Google Scholar for academic writing, reading, research, problem-solving, and time management. AI use was found to contribute positively to perceived academic skill development, particularly in writing, research, critical thinking, and error reduction. No significant differences were observed across academic streams or year of study, whereas male students reported slightly higher levels of AI awareness and usage than female students. Participants also expressed concerns regarding the accuracy of AI-generated information, excessive dependence on AI, and issues related to academic integrity. The study highlights the importance of strengthening AI literacy, promoting ethical AI practices, and integrating AI effectively into higher education curricula to support responsible and meaningful academic learning. Keywords: Artificial Intelligence, AI awareness, academic skill development, undergraduate students, higher education, digital learning, AI literacy.