Financial Year End Checklist – Income Tax & GST

CA Sameeksha Pandit 25 Mar 2021 19,212 Views 1 comment Print Goods and Services Tax | Articles

Since we have the financial year as April to March in India, March end is always known to be a bustling for the tax professionals and businesses. What is it exactly that brings so much of hassle for all of us?

This article lists down the activities that are to be complied with before 31st March 2021. Also, new compliances are awaiting your attention and actions with effect from 01st April 2021. So, let us become compliance ready.

Income Tax Act 1961

Tax Planning-

31st march 2021 is the last date to make investments and get deduction from income tax liability for the financial year 2020-21. Taxpayers must be in a position to estimate their income and the tax liability more accurately in order to invest and claim the deduction, if required.

As a part of this, if a taxpayer having business or profession (within the meaning of the act) who is planning to acquire any asset, may purchase and put to use the same before 31st march 2021. This would give the taxpayer 50% depreciation of the prescribed rate.

Revised / Belated return

If a taxpayer has not filed the return of income for the financial year 2019-20, then the same can be filed on or before 31st March 2021 as “belated return” along with the applicable penalty and interest.

Also, if a taxpayer has already filed the return for the financial year 2019-20, then the same can be revised for any rectification of the error on or before 31st March 2021

Linking of PAN with Aadhaar

31st march 2021 is extended last date to link PAN with the Aadhaar of the taxpayer. In case of failure to comply with the same,

a. the PAN so allotted shall be deemed to be inoperative / invalid from 01st April 2021.

Note:- It can be linked even after it is flagged as inoperative / invalid

b. TDS and TCS would be deducted at a higher rate

c. A taxpayer will not be allowed to furnish a return of income.

d. Penalty under section 234H of the act shall be levied upto Rs. 1000

Due date for furnishing TDS and TCS return

31st March 2021 is the extended due date to furnish the statement of TDS and TCS deducted / collected for the period of 1st and 2nd quarter of the financial year 2019-20.

Vivad se Vishwas Scheme

31st March 2021 is the extended due date to file declaration and payment of tax under Vivad se vishwas without additional charges.

Saving of interest on advance tax payment

As per section 234B, interest at the rate 1% per month or part thereof is levied form 01st day of the assessment year till the date of making the application in the following two cases-

a. When the taxpayer has failed to pay advance tax; or

b. Where the advance tax paid by the taxpayer is less than 90% of the assessed tax.

Hence, the interest under this section may be saved by paying the amount of advance tax.

Indirect Tax – GST

Opt in for Composition scheme-

Persons eligible to pay tax under composition tax as per section 10 of CGST Act 2017 along with the rules made thereunder, 31st March is the due date to opt for the composition scheme for the upcoming year. Existing composition taxpayers need not file a fresh intimation.

Letter of Undertaking-

Letter of undertaking is the document that the user provides declaring fulfilment of certain requirements under GST. It is furnished in case of export undertaken without paying IGST. 31st March is the due date for renewal of LUT for the upcoming year.

Issuance of E-invoice for B2B supplies-

GST taxpayers whose aggregate turnover exceeds Rs. 50 crores in any Financial Year from 2017-18 onwards, shall issue an E-invoice for supply of goods and services as per the rule 48 of CGST rules.

HSN Code on the tax invoice

GST taxpayers are required to mention the HSN code on the tax invoice issued as follows-

Sr. No.	Aggregate turnover in the preceding FY	No. of HSN digits to be mentioned	Applicability
1	Upto 5 crore	4	Mandatory for B2B tax invoices and optional for B2C tax invoices
2	More than 5 crores	6	Mandatory for all tax invoices (B2B + B2C)

Note- Since this is applicable for tax invoices, the same will not be applicable to composition taxpayers.

Filing of GSTR 9 and 9C

31st March 2021 is the extended due date to file annual GST returns for GST taxpayers whose aggregate turnover exceeds Rs. 2 crores in FY 2019-20. Also, the taxpayers having aggregate turnover more than Rs. 5 crores in FY 2019-20, shall file the reconciliation statement in Form GSTR 9C on or before the said date.