Arjun (Fictional Character): Krishna, the financial year 2022-23 is about to end, and the new financial year is about to start. How should a taxpayer prepare himself for this year's march ending?
Krishna: Arjuna, the month of March is very important for all Taxpayers. In our Country, the Financial Year from April to March is applicable to all Tax related laws. Thus Books of Accounts are prepared from April to March.
Arjun (Fictional Character): Krishna, which are the important tasks of income tax that should be undertaken before this March end?
Krishna: Arjun, the following are the important things that the taxpayer shall keep in their mind -
- Advance Tax: 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.
- 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.
- TDS on Salary: Salaried Employees should give the details of Investments and deductions to the Employer so that less TDS will be deducted in March.
- Aadhaar-PAN linking: Aadhaar- PAN linking is now mandatory for PAN holders requiring the filing of Income Tax returns. The last date to link Aadhaar Card and PAN is 31.03.2023. If Aadhar and PAN are not linked till 31.03.2023 the PAN will thereafter become in-operative and consequently, the taxpayer would be unable to complete any PAN-related transactions.
- 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 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.
- Form 15 G/ H: The taxpayers who have income only from interest and the income is less than the prescribed limit, then they can file a declaration manually or online in Form 15 G/ H.
- Deduction for statutory dues: If the taxpayer follows cash basic 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.
- Calculation of depreciation: The taxpayer should do the calculation of the depreciation on the fixed asset at the time of year-end.
- Closing Stock Verification: The taxpayers should do the verification of Stock at the year's end. Along with that, verification of immovable property should also be done and match them with book value.
- Bank Reconciliation: It is very important to reconcile all the bank accounts and loan accounts at the year's end.
- Comparative Balance sheet and Profit and loss A/C: Taxpayers should prepare a Comparative Balance sheet and Profit and loss A/c for the year. So that they will come to know the total turnover, Profit - Loss, Expenditure, etc. Similarly, check the accounting ratios also.
Arjun: Krishna, what lesson the taxpayer should learn from this?
Krishna: Arjun, the taxpayers should take precautions at the right time i.e., March ending, so that they can save themselves from litigations under Income Tax. The benefit of taking precautions at the March end will help taxpayers to overcome all the offences in the upcoming new year.
Tags income tax