Important things from the Income Tax aspect Archives

What are the important things from the Income Tax aspect to consider this March ending? Introduction As the financial year 2022-23 comes to an end, taxpayers need to take certain steps to ensure they comply with Income Tax laws and regulations. Failing to comply with the rules can lead to interest, penalties, and other consequences. In this article, we will discuss the important things from an Income Tax perspective that every taxpayer should consider before the end of the financial year 2022-23 and the beginning of the new financial year of 2023. What are the things to be considered at the end of March 2023? As we approach the end of the financial year, taxpayers need to take stock of their finances and ensure they're meeting all their obligations. In particular, there are several key considerations from income tax and GST perspective which are listed below-: 1. Advance Tax Payment: If taxpayers have not paid Advance tax before 15th March, then it shall be paid before 31st March so that less interest will be levied. Advance tax refers to the payment of taxes in advance by taxpayers on their estimated income for the financial year. The Income Tax Act mandates that individuals and businesses whose tax liability exceeds Rs. 10,000 should pay Advance tax. Failing to pay Advance tax can result in interest being levied. 2. Investment for Deduction: If deduction u/s 80 is to be claimed in Income tax for F.Y. 2022-23, then every taxpayer should verify the limits of Income tax and their tax liability and should invest, donate, etc. before 31st March 2023. Section 80 of the Income Tax Act provides various deductions to taxpayers on investments made in specified schemes, such as ELSS, PPF, NPS, and others. Taxpayers need to plan their investments before the end of the financial year to claim these deductions. 3. TDS on Salary: Salaried Employees should give the details of Investments and deductions to the Employer so that less TDS will be deducted before March ending. Tax Deducted at Source (TDS) is a mechanism through which the government collects taxes on income earned by individuals. Employers deduct TDS from the salaries of their employees and deposit it with the government. Employees need to provide details of their investments and deductions to their employers to ensure the correct amount of the Tax Deducted at Source. 4. Aadhar-PAN linking: Aadhar-PAN linking is now mandatory for PAN holders requiring the filing of Income Tax returns. The due date to link Aadhar Card and PAN was 31.03.2023, but the Indian government has extended the due date to 30.06.2023. If Aadhar and PAN are not linked till 30.06.2023, the PAN will thereafter become in-operative, and consequently, the taxpayer would be unable to complete any PAN-related transactions. 5. Annual Information Statement (Form 26AS): Every Taxpayer should download Form 26AS and verify TDS deducted/TCS collected. Similarly, taxpayers should also verify the Income as mentioned in 26AS and AIS (Annual Information Statement) with Books of Accounts. Also, they should check whether the SFT transactions like purchase of mutual funds above Rs. 2 Lakh, purchase of four-wheeler above Rs. 10 Lakh, purchase or sale of the property above Rs. 50 Lakh, etc are reflected in Form 26AS or not. 6. Form 15 G/ H: Taxpayers who have income only from interest and the income is less than the prescribed limit can file a declaration manually or online in Form 15 G/ H. 7. Deduction for statutory dues: If the taxpayer follows the cash basic accounting system and wants to claim the deduction of the statutory dues paid, then he must make the payment of said dues before March ending or 31st March. Taxpayers need to pay their statutory dues, such as property tax, service tax, or other similar dues, before the end of the financial year to claim a deduction. 8. Calculation of Depreciation: The taxpayer should do the calculation of the depreciation on the fixed asset at the end of the year. This will help them in reducing their tax liability. 9. Closing Stock Verification: Taxpayers should verify the stock at the end of the year. Along with that, verification of immovable property should also be done, and they should match them with the book value to avoid any discrepancy. 10. Bank Reconciliation: It is essential to reconcile all the bank accounts and loan accounts at the end of the year to avoid any errors or discrepancies. 11. Comparative Balance Sheet and Profit and Loss Account: Taxpayers should prepare a comparative balance sheet and profit and loss account for the year. This will help them to analyze their total turnover, profit-loss, expenditure, etc. It is also essential to check the accounting ratios to understand the financial transactions of the business. 12. Compliance with GST: Businesses need to comply with GST regulations. Taxpayers should ensure that all their GST returns are filed before the due date, and all the GST liabilities are paid before 31st March. 13. Income Tax Return Filing: Taxpayers should file their income tax returns on time to avoid any penalties or interest. The due date for filing income tax returns for the financial year 2022-23 is 31st July 2023. It is important to keep all the necessary documents ready before filing income tax returns. 14. Tax Audit: If the taxpayer's turnover exceeds the prescribed limit, they will be required to get their accounts audited by a Chartered Accountant. The Due date for getting the tax audit done is 30th September 2023. 15. Start of the New Financial Year: With the end of the financial year 2022-23, a new financial year will begin on 1st April 2023. Taxpayers should plan their investments and expenses accordingly to optimize their tax liability. Conclusion As the financial year comes to an end, taxpayers should be aware of the various tax-related compliances to avoid any last-minute hassles. From paying advance tax to verifying the closing stock, several tasks need to be done before the financial year ends. Taxpayers should also keep in mind the start of the new financial year and plan their investments and expenses accordingly. It is always advisable to seek professional help from a Chartered Accountant to ensure that all tax-related compliances are done on time. By following the above checklist, taxpayers can ensure that they are fully compliant with the Income Tax laws and regulations.

Important things from the Income Tax aspect

Important things from the Income Tax aspect to consider this March ending