Do before 31 March: Year-End Financial Checklist: Income Tax, GST & Compliance

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As the financial year comes to a close, it’s crucial for individuals and businesses to ensure that they have completed all necessary tasks to maintain compliance and financial health. Here’s a detailed checklist covering various aspects including Income Tax, Goods and Services Tax (GST), and other financial considerations for the upcoming deadline on 31st March, 2024.

Income Tax:

Investment for Tax Deductions: Evaluate and make necessary investments eligible for deductions to reduce taxable income for the financial year 2023-24. Popular investment options include Public Provident Fund (PPF), Life Insurance Corporation (LIC), Equity Linked Savings Scheme (ELSS) Mutual Funds, Health Insurance, etc.

Advance Tax Payment: Calculate your tax liability for the year and ensure timely payment of advance tax to avoid penalties.

Filing Updated Income Tax Returns: This is the last opportunity to file updated income tax returns for FY 20-21 by paying an additional 50% tax. Similarly, for FY 21-22, individuals can file returns by paying only 25% additional tax before the deadline, after which the penalty increases to 50%.

43B(h) Compliance: Ensure compliance with Section 43B(h), which mandates timely payment to Micro and Small Enterprises. Payments to such entities should be made within 45 days/15 days as applicable.

TDS and TCS Provisions: If your turnover for FY 2023-24 exceeds Rs. 10 Crores, be aware that TDS provisions under section 194Q and TCS provisions under section 206C(1H) will become applicable for FY 2024-25.

Transporter Declarations: Obtain declarations from transporters regarding non-deduction of TDS under section 194C.

Account Reconciliation: Reconcile and account for TDS and TCS credits in your books of accounts to ensure accurate financial reporting.

Goods and Services Tax (GST):

File Letter of Undertaking (LUT): For businesses involved in exports of goods/services or supplies to SEZ units/developers without payment of Integrated Goods and Services Tax (IGST), filing an LUT for FY 2024-25 is necessary.

Opt for Composition Scheme: Businesses eligible for the composition scheme must apply for it for FY 2024-25.

GTA Services Providers Declaration: Providers of Goods Transport Agency (GTA) services should file a declaration for opting to pay tax under the forward charge mechanism for FY 2024-25. Recipients must maintain records of such declarations to justify non-payment of tax under the reverse charge mechanism.

E-Invoicing Requirement: If your turnover for FY 2023-24 has exceeded Rs. 5 Crores for the first time since the inception of GST, you must generate and issue E-Invoices for supplies from 01st April, 2024.

Input Tax Credit (ITC) Reversal: Review outstanding payments to creditors. If payments are due for more than 180 days, reverse the input tax credit availed on such transactions.

New Invoice Series: Start a new invoice series from 01st April, 2024, unique for FY 2024-25, in compliance with GST regulations.

GST Data Reconciliation: Reconcile data filed in GST returns with books of accounts. This includes verifying turnover, matching balances in Electronic Credit/Cash Ledger, adjusting ITC available in books but not appeared in GSTR-2B, reversing excess ITC claimed, if any, discharging RCM liability missed during the year, etc.

GST-TDS and GST-TCS Credit: Reconcile and account for GST-TDS and GST-TCS credits in your books of accounts.

Other Considerations:

  1. Year-End Provisions: Make necessary year-end provisions and account for depreciation, amortization, and other adjustments.
  2. Financial Verification: Verify closing stock, cash balance, bank balance, and interbranch balance to ensure accuracy in financial reporting.
  3. Interest Income Accounting: Collect Fixed Deposit statements from the bank and account for interest income earned during the financial year.
  4. Statutory Compliance Check: Double-check statutory compliances on all transactions, including TDS, TCS, and Reverse Charge Mechanism (RCM).
  5. Foreign Exchange Impact: Account for any foreign exchange fluctuations and their impact on financial statements.
  6. Balance Confirmation: Confirm balances with third-party entities to ensure accurate financial reporting and resolve any discrepancies.
  7. Year-End Financial Statements: Prepare year-end financial statements, including balance sheet, profit and loss statement, and cash flow statement, in compliance with accounting standards.
  8. Audit Preparation: Facilitate external audits by providing auditors with access to financial records, supporting documentation, and necessary explanations.
  9. Internal Control Review: Conduct a review of internal controls and procedures to identify any weaknesses or areas for improvement in financial reporting and compliance.
  10. Review of Accounting Policies: Evaluate accounting policies and practices to ensure alignment with regulatory requirements and industry best practices.
  11. Corporate Governance Compliance: Ensure compliance with corporate governance guidelines, including board composition, disclosure requirements, and shareholder communication.
  12. Tax Planning for the Next Financial Year: Engage in tax planning activities for the upcoming financial year, considering changes in tax laws, business operations, and financial goals.
  13. Risk Management Assessment: Conduct a comprehensive risk assessment to identify and mitigate potential financial, operational, and compliance risks.
  14. Staff Training and Development: Invest in training and development programs for finance and accounting staff to enhance skills, knowledge, and competencies.

Disclaimer: This checklist is for informational purposes only and does not constitute financial or legal advice. Individuals and businesses should consult with their tax advisors or financial professionals for specific guidance tailored to their unique circumstances.

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Pooja Gupta

CA Pooja Gupta (CA, ISA, having 15 years of experience. Educator and Digital Creator

Disclaimer:- The opinions presented are exclusively those of the author and CA Guruji Classes. The material in this piece is intended purely for informational purposes and for individual, non-commercial consumption. It does not constitute expert guidance or an endorsement by any organization. The author, the organization, and its associates are not liable for any form of loss or harm resulting from the information in this article, nor for any decisions made based on it. Furthermore, no segment of this article or newsletter should be employed for any intention unless granted in written form, and we maintain the legal right to address any unauthorized utilization of our article or newsletter.

CA Pooja Gupta (CA, ISA, having 15 years of experience. Educator and Digital Creator

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