Accounting Areas to Take Care of Before the Financial Year Ends
The end of the financial year is March 31, so it’s important for all Indian taxpayers, whether they are salaried, self-employed, or business owners, to get their accounts and financial paperwork in order. Not only does getting ready on time make it easier to file income tax forms, but it also helps lower tax bills through valid claims and deductions. Here is a list of important accounting tasks that you need to finish before the end of the fiscal year.
1. Match up the Books of Accounts
Make sure that all of your financial documents, like your bank statements, cash book, invoices, receipts, and expense bills, are up-to-date and correctly written. When you reconcile, you compare your internal financial records to statements from outside sources like banks, credit card companies, the GST portal, and so on. This is useful for:
- Looking for differences
- Keeping from making two entries
- Making sure that the financial reports are correct
Reconciliation also makes sure that companies file their GST and TDS returns correctly, which keeps them from getting fined in the future.
2. Make Sure You Paid Your Taxes Early
If you owe more than ₹10,000 in taxes for the year, you have to pay the extra money in four instalments. The last payment is due on March 15th. See if
- We’ve paid all of our bills on time.
- On the income tax portal, the amounts paid are shown properly.
- Any self-assessment tax you owe must be paid to make up the difference.
Since Sections 234B and 234c charge interest for late payment of advance tax, it’s best to pay off your debts before the end of the year.
3. Figure out and Plan Your Tax-Deductible Investments
These are the most popular parts:
- Part 80c (up to 1.5 lakh):Â Funds like PPF, EPF, ELSS, NSC, LIC payments, and tax-saving FDS
- Section 80d: The cost of health insurance
- Interest on a student loan under Section 80E
- Section 80G: Giving to organisations that qualify
To get the tax break for this year, make sure your investments are finished by March 31.
4. Check the TDS Credits (Form 26AS and AIS)
The TDS that your company, banks, or clients take out is shown on Form 26AS and the Annual Information Statement (AIS) on the income tax portal.
You should:
- Make sure that Form 26AS matches your TDS license or Form 16.
- Make sure that all TDS credits are recorded properly.
- This step helps you figure out your taxes correctly and keeps you from getting tax letters or refund delays.
5. Changes to the Fixed Asset Register and Depreciation
- Keep a fixed asset register that is up to date
- Keep track of when things are bought, sold, or given away.
- Follow the rules in the Income Tax Act or the Companies Act to figure out and use depreciation.
It’s important to do depreciation before the end of the year because it lowers your taxable income.
6. Look Over the Outstanding Bills and Receipts
- Follow up with clients who haven’t paid their bills or payments.
- As much as possible, get rid of your debts.
- Set aside money for bad bills if you think you won’t be able to collect on some receivables.
This gives you a more accurate picture of your finances and makes sure that your balance sheet is correct and up to date.
7. Valuing the Inventory and Checking the Stock
- Companies that sell items must: Do a physical stock count
- Match up the stock books with the bookkeeping books.
- Use the right way to value things (FIFO, weighted average, etc.).
The cost of goods sold (COGS) and your end profit are affected by how you value your inventory. This affects both your income tax and GST filings.
8. Figure out GST and Pay It
Liabilities for individuals who have registered for GST:
- Book matching with GSTR-3B and GSTR-1
- Use all of your available Input Tax Credits (ITCs).
- Don’t pay late fees or interest by filing your tax forms late.
Also, check to see if you need to reverse any GST payments, such as ITC payments for personal use or goods that are exempt.
9. Making Plans for Capital Gains
- Find your short-term or long-term cash gains.
- A good way to save on taxes is to invest in things that are tax-free, such as Section 54 (land), 54EC bonds, and so on.
- Keep the right paperwork for sales and purchases, like brokerage records.
10. Make Final Changes to Provisions and Year-end Adjustments
Plan for:
- Costs that have been spent but not yet paid (like audit fees, salaries, electricity bills, etc.)
- Amounts of interest earned but not yet received
- Employees are given bonuses and other incentives
These changes make sure that your books show your true earnings and follow accounting rules.
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Taking care of your accounting tasks before the end of the fiscal year can help you avoid stress, fines, and tax problems in the future. It’s a good habit that helps you be more responsible with your money, file your taxes more efficiently, and make sure your ITR filing goes smoothly. Reach out to TaxDunia for fixing accounting Areas to Take Care of before the Financial Year Ends.
