Pre-End of Accounting Year Checklist

The financial year starts from April and ends in March each year. So, March 31st is an important date for everyone because they need to finish some important money tasks like saving, investing, taxes, statutory dues and paying bills. For people who are doing business, it’s really important to check all their transactions and make sure they’re written down correctly in their accounts before March 31st. This year, the government added some new rules. For example, Income Tax added a new point called 43-B (h). Because of the new rule 43-B (h), many businessmen are facing challenges and they need to make sure they pay their bills on time.

Now in this article we are discussing some important point on which we care and complete before end of the financial year as below:-

Make Investment for save Income Taxes:– Everyone who is filed income tax return should make investment for save income taxes. As per income Tax act provides many type of saving/investment way in which some amount invest and take advantage in lower tax pay. For example if individual & HUF Individuals are entitled for deduction u/s 80C of the Income Tax Act for a deduction up to an amount of investments of Rs. 1,50,000/- and for additional deduction of Rs. 50,000/- u/s 80 CCD for investments in National Pension Scheme (NPS) subject to certain terms and condition. More deductions on account of payment of premium for health insurance u/s 80D, donations u/s 80G are allowable only if the investment/ payment have been made on or before 31st March 2024.

Pay Advance Tax:- If assessee should calculated estimated taxable income as possible, calculate the tax liability and deduct the Tax Deducted at Source (TDS) to arrive at the total advance tax payable and pay the same before 15 March. It is necessary that check and re-calculate before end of the 31 March & found short paid of advance income tax than shall be deposit balance payment of advance Income Tax.  If an assessee not paid advance tax up to 90% of total estimated income tax than interest will pay @1% to till the date of actual Income tax pay

Pay to MSME unit u/s 43B (h) of income Tax:- A provision new insert 43B (h) which provides that any amount payable to MSME register person only micro & small unit (other than traders) shall be allowed as deduction on actual payment basis only. We can say that it is mandates payment to MSME register person within the time as per written agreement which cannot be more than 45 days, and if there is no such written agreement than payment shall be paid within 15 days. In this case older provision section 43B of the Act allowing deduction for payment before due date of filing ITR, shall not be applied. So assessee must be payment before 31 March 2024 if 45/15 days have been passed. let’s see with example if buy a material dated 01.03.2024 from MSME unit and no agreement has to made between both the parties than due date for payment is 15.03.2024 but if actual payment shall made before 31.03.2024 than it is allowable expenses for FY 2023-24 other it shall disallowed for FY 2023-24 and allowable in which year than it shall actually paid.

 Reconcile GST Ledger: – GST payments are done either via tax credit or via challan payments. The taxpayers should reconcile the Cash Ledger, Credit Ledger and Liability Ledger on GSTN portal with their books of accounts. Further, debit notes, credit notes, rate difference, discount, etc also should to be reconciled. We have check, compare & reconcile the Input Tax Credit (ITC) claimed in returns with shown in GSTR-2B form. If excess input claim than pay excess GST with Interest and also provide reason for difference to department. So avoid this scenario remind suppliers to file their GST returns take input before end of the financial year. In the case of exporter than time to renew your Letter of Undertaking (LUT) if planning to export goods or services without IGST payment next financial year.

File updated ITR: – ITR-U (update ITR) is the form which is offer by income tax department to update assessee Income tax return or file return within two years from the end of relevant Assessment Year. It means before closing of 31 march 2024 assessee shall file ITR-U up to end of the FY 2021-22.If found any assessee has made an error in their original return or has omitted/error certain income & assessee has not furnished return  under section 139(1), 139(4), 139(5). The concept was introduced in the union budget 2022 under section 139(8A) of Income tax Act, 1961 which allows assessee to update your ITR within 24 months from the end of relevant assessment years. So now time file ITR-U before end of 31 March 2024.

Compliance of corporate social responsibility:- As per u/s 135 of company act 2013 provide CSR provisions talks about Corporate Social Responsibility (CSR). It means that some companies have to help out society. But not all companies have to do this—only certain ones  they spends in every financial year at least 2% of its average net profits made during the immediately preceding three financial years. Now, before March ends in 2024, these companies need to make sure have amount spent on CSR activities and made compliance as per required by MCA to avoid penalty.

Conclusion: As March 31st, 2024, gets nearer, it’s super important for taxpayers and registered businesses to make sure they are following all the rules & provision for smooth business. Whether it’s paying advance taxes or following Section 43B (h) rules, doing your annual book checks, or sorting out your GST paperwork, each task is really important. By doing these things properly, individuals and businesses can make sure they’re staying on the right side of the law and avoiding any trouble or extra costs. So, it’s crucial for everyone to get these tasks done before the deadline to keep everything. This article only for informational and education purpose, however it is advisable to consult with tax professional for specific issue and challenge