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How to start a new financial year without becoming a financial fool?

CA Umesh Sharma , Last updated: 01 April 2024  
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Arjuna (a fictional character): Krishna, It is the beginning of the new financial year 2024-25. Most taxpayers are curious to know about the things they should keep in mind from the start of the new financial year so that they will not commit the mistakes they made in previous years.

Krishna (a fictional character): Arjuna, As the new financial year comes with various changes and compliances, the taxpayers must know about such changes and compliances, which need to be done by them at the beginning of the financial year.

Arjuna (a fictional character): Krishna, What are the changes and points that the taxpayer should know at the beginning of the new financial year relating to income tax?

How to start a new financial year without becoming a financial fool

Krishna (a fictional character): Arjuna, Following are the things to keep in mind at the start of FY 2024-25:

  1. Assess the previous year's turnover, and accordingly, if they fall within the threshold limit of MSME, they should obtain the Udyam registration and provide details regarding it to their buyers.
  2. Obtain the details of the suppliers who have taken the Udyam registration and shall make the payment to all those suppliers within 45 days (i.e., payment for all purchases made between February 15, 2024, and March 31, 2024 shall be done before May 14, 2024), considering the 45-day period to avoid disallowance of expenses in the Financial Year 2023-24.
  3. If turnover in the previous year exceeded 10 crore, then the taxpayer shall deduct TDS u/s 194Q or collect TCS u/s 206C(1H) at 0.1% if the total purchase exceeds 50 lakhs in FY 2024–25.
  4. Check the inoperative PAN status of all deductees, and if the PAN is found to be inoperative, then deduct TDS at 20%.
  5. Redownload and check the 26AS and AIS of AY 22-23 and AY 23-24, and if any income is not reported in the income tax return, then they should file the updated return.
  6. Evaluate the turnover for FY 23–24 and check the applicability of the tax audit (Rs. 1 crore or 10 crore) and eligibility for presumptive taxation (Rs. 3 crore).
  7. If the business wishes to continue in the old scheme, then they shall file Form 10 IEA before filing the income tax return for FY 23–24.
 

Arjuna (a fictional character): Krishna, What are the changes and points that the taxpayer should know at the beginning of the new financial year relating to GST?

Krishna (a fictional character): Arjuna, Following are the things to keep in mind at the start of FY 2024–25:

  1. If the turnover in the previous FY exceeded 5 crore, then it is mandatory to do e-invoicing from April 1, 2024.
  2. A taxpayer whose turnover in the previous year did not exceed Rs. 1.5 crore had the option to opt for the composition scheme in FY 24–25.
  3. A taxpayer whose turnover in the previous year was less than 5 crore had the option to opt for the QRMP scheme in FY 2024–25.
  4. A new billing series may be started for FY 2024–25.
  5. All exporters or those who supply goods to SEZ units must mention the LUT number (of the new LUT filed for FY 24–25) on the invoices issued w.e.f. April 1, 2024.
 

Arjuna (a fictional character): Krishna, what should one learn from this?

Krishna (a fictional character): Arjuna, As we start the journey of the new financial year, let us not be April fools when it comes to our finances. Just as April 1 brings with it tricks and pranks, the field of finance too can bring unexpected surprises if we are not careful. In this vast comedy of finance, let's embody the role of experienced players, turning April fools into April sages with each wise decision we make along the way.


Published by

CA Umesh Sharma
(Partner)
Category Income Tax   Report

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