Arjuna (Fictional Character): Krishna, the last month of the financial year 2017-18 has started and so are the worries of all the taxpayers, how should a taxpayer prepare himself for this year's March ending?
Krishna (Fictional Character): Arjuna, the month of March is very important for all Taxpayers. In our Country, the Financial Year starting from April to March is applicable for all Tax Laws. That's why Books of Accounts are prepared for the period of April to March. All the adjustment should be made on year end.
Arjuna: Krishna, which are the 15 important tasks of income tax which should be done before March end?
Krishna: Arjuna, following are the 15 important tasks of income tax which should be done before March end:
1. Last chance to file returns for the financial year 2015-16 and 2016-17 - If the taxpayer has not yet filed the income tax return for the financial year 2015-16 and 2016-17, then it is last chance to file the returns upto 31st March. After that the said returns can not be filed.
2. Correct information to the Employer - Salaried Employee should give the details of Investments and deductions to Employer so that less TDS will be deducted in the month of March.
3. Payment of Advance tax - If Taxpayers have not paid Advance Tax before 15th March then it should be paid before the 31st March so that less interest is levied.
4. Form 26 AS - Every Taxpayer should download Form 26 AS and verify TDS deducted. Similarly, taxpayer should also verify the Income as mentioned in 26 AS with Books of Accounts. Also check the EFT transactions like purchase of mutual funds above Rs. 2 Lakh, purchase of four wheeler above Rs. 10 Lakh, purchase or sale of property above Rs. 50 Lakh, etc are reflecting in the Form 26 AS or not.
5. Investment for deduction - If in income tax return deductions u/s 80 have to be claimed, then every taxpayer should verify their tax liability and should make the investment, donation, etc. before 31st March.
6. TDS - Deductions of the tax on all the expenses for the period April to February to be done before 31st March 2018, if not deducted 30% of such expenditure may be disallowed.
7. Projected and Comparative balance sheet and profit and loss A/c - Taxpayers should prepare Projected and Comparative balance sheet and profit and loss A/c for the last year. So that they will come to know the total turnover, Profit - loss, Expenditure, etc. Similarly, check the accounting ratios also.
8. Reconciliation - It is very important to reconcile all the bank accounts and loan accounts at the year end.
9. Closing Stock Verification - All the taxpayers should do the verification of Stock at the year end. Along with that, verification of immovable property should also be done and match them with book value. If it will not match, then prepare the reconciliation statement.
10. Option of Presumptive taxation for business - Business taxpayers should calculate the turnover on 31st March. If the total turnover is less than Rs. 2 Crore, then they can use the option of Presumptive taxation on @8% profit. But if the total turnover exceeds Rs. 2 Crore, then tax audit is compulsory.
11. Option of Presumptive taxation for Profession - professional taxpayers should calculate the gross receipts on 31st March. If the total gross receipts are less than Rs. 50 Lakh, then they can use the option of Presumptive taxation on @50% income. But if the total gross receipts exceed Rs. 50 Lakh, then tax audit is compulsory for them.
12. Deduction for statutory dues - If the taxpayer has cash basis accounting system and he wants to claim the deduction of the statutory dues paid, then he must make the payment of said dues before 31st March.
13. Calculation of the depreciation - The taxpayer should do the calculation of the depreciation on the fixed asset at the time of year end.
14. Taxable LTCG in case of sale of shares or equity oriented mutual fund - The LTCG on sale of shares or equity oriented mutual fund exceeding Rs. 100000 is taxable from 1st April, 2018 @ 10%. So, if the taxpayers want to sale the shares or equity oriented mutual fund then they must do it before 31st March.
15. Form 15 G/H - The taxpayers who have income from interest only and it is less than the prescribed limit, then they can file manually or online in Form 15 G/H.
Arjuna: Krishna, what lesson the taxpayer should take from this?
Krishna: Arjuna, taxpayers have to follow certain tax rules and regulations before the Year end. Similarly, for different taxes, provisions have to made in the books of accounts. Advance planning is always helpful. So, all the taxpayers should complete the pending work before March end.
Tags Income Tax