Reminders for Companies/Management Related to year end Tax Compliances
With the financial year (2019-20) approaching an end, each business has accelerated its tax compliances. Amidst this hassle, here are some key pointers that every business/management must keep in mind prior to closing their financial year:
1. TDS Deduction as per ‘Year End Provisions’ –
There is a history where companies generally do not deduct TDS on the basis of ‘Year End Provisions’ like Audit Fees, Annual Filing Charges, etc.
2. Validating the Closing Stocks (till 31.03.2020) –
Every business is required to validate its closing stocks (till 31.03.2020) item wise and quantity wise.
3. Accumulating all Loans and FD Statements –
Professionals working on behalf of the businesses are recommended to have the complete documents of ongoing loans, FD Statements and records of actual/accrued interests.
4. Records of balances from ongoing parties –
It is mandatory for businesses to have complete records of balance confirmations from all the creditors and debtors and reconcile the balances. Here one needs to reconcile the information with Form 26AS.
5. Proofs of investments declared by Employees (for TDS Deduction) –
TDS is calculated on the basis of investments done by the employees there are cases where employees have no investments, so TDS has to be deducted accordingly. Therefore it is the indispensable need for a company to have proof of the investments declared by the employees (at the beginning of the financial year) so that they can re-compute the tax liability and accordingly deduct balance TDS before dispersing the salaries of March month.
6. Reconciling balance of the company’s other outlets –
It is highly recommended for the companies to tally its inter-branch balances, else they might face difficulty in closing the company’s books at the end of the year.
7. Obtaining the reimbursement statements from employees –
It is advised to the accountants to obtain the reimbursement sheets from the entire employee accumulation and mention those expenses in the same financial year. It is often seen that people ignore such expenses and mention it in the next FY.
8. Obtaining complete bank statements –
It is recommended to the professionals to have bank statements downloaded and maintain the Bank Reconciliation Statement (BRS) as required.
9. Have all GSTR 2A –
It is highly recommended for the professionals working on behalf of the companies to download all GSTR 2A for FY 2019-20 and record all the GST inputs excluding the ineligible ITC claims. If any of the input is not mentioned in GSTR 2A, then the accountant is required to inform the management so it can be rectified immediately.
10. Reverse the GST inputs (in case of pending payments) –
There are cases where companies have GST inputs for which payments are pending for more than 180 days. Such details are to be reversed and the related tax liabilities are to be paid.
11. Cross-check for income on which Zero or partial GST is paid –
For cases where GST on income is not paid or paid at lower rates, do consult the same with your advisor. And for tax-exempt export supplies, make sure you have proper LUT for the concerned financial year.
12. Find out the expenses on which TDS is not deducted –
For any expense on which TDS is deductible and it is not yet deducted by you, do confirm the TDS applicability with the consultant and deduct TDS accordingly.
13. Advance Tax Payments –
As it is the end of the financial year, make sure you have paid all your advanced taxes and if not then pay off the liabilities as soon as possible to avoid penalties.
14. Determine properly the Foreign exchange fluctuations –
In case there is any involvement of foreign parties or there is income from any foreign asset or investment where balance pending, check the currency rate on 31.03.2020 and apply AS-11 (to declare fluctuation difference). Consult from the expert if needed.
15. Reconcile the unclaimed challans –
Reconcile the unclaimed challans by referring to TRACES (as on 30.03.2020) and the debit balance showing in the books of accounts.
16. Match GST ledger balance –
Tally all your GST ledger balances as on 31.03.2020 like Electronic Cash Ledger, Electronic Credit Ledger & Electronic Liability Ledger with balances in books of accounts.
17. GST on advanced payments –
One must make sure that GST has been paid on advances received from customers as on 31.03.2020.
18. TDS on Advanced Payments –
Make sure that TDS is paid on Advanced Payments made to the suppliers, exclusively when there are advanced balances mentioned in books of accounts on 31.03.2020.
19. ESI and PF registration –
If ESI and PF registrations are not done due to less number of employees, reconfirm about the applicability of ESI and PF registrations and apply for registration (in case the employee accumulation has increased).
20. Refund for FY 2017-18 –
The last date to apply for a refund of GST related to FY 2017-18 is 31.03.2020. Ensure to timely make the compliances if applicable.
21. Reports of Salaries of Founders –
The case is especially for the startups where founders or other key influentials (part of the management) do not take the salaries on time and at last, take the lump sum while filing their own ITRs. Management or other concerned persons are advised to rectify such salary payments and deduct the TDS in march 2020 itself (before the end of the financial year).
22. Depreciation on fixed assets –
It is highly recommended for a company or the professional working on its behalf to assure that depreciation as per Schedule II of Companies Act,2013 is appearing in Books of Accounts.
23. Loans not allowed to Directors or any concerned individuals –
No director or any related individual is entitled to achieve a loan from the company, as mentioned in Companies Act 2013 (exceptions prevail). accountants need to make sure that company is not providing any loan to such individuals.
24. Make changes in invoices of FY 2018-19 –
For exports in FY 2018-19, due date for introducing any change in any invoice is 31.03.2020. Companies are recommended to do the needful before 31.03.2020.
25. The due date for filing the ITR –
Companies or individuals who haven’t filed ITR for FY 2018-19 n the due date can still file the ITR. Belated ITRs can be filed with the penalty of Rs. 10,000. No ITRs would be accepted after 31 March 2020.
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Author Bio
Any changes in above compliance dates in view of FM’s announcement today, 24 Mar 2020