Essential GST & Income Tax Compliances to Fulfil By 31st March 2024
Essential GST & Income Tax Compliances to Fulfil By 31st March 2024
As we near the end of the financial year, the urgency to fulfil tax responsibilities by March 31 is evident among individuals and business owners. This period is critical for ensuring full compliance with tax regulations. To protect your business’s interests, we’ve carefully listed the essential actions that must be completed by this crucial deadline. Neglecting these responsibilities as the financial year wraps up could result in considerable repercussions. Moving quickly and ensuring all required steps are taken without delay is essential. This article delves into the critical aspects of GST and Income Tax compliances, providing clarity and guidance to navigate the complexities of tax regulations effectively.
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File ITR Now!Key Tax Obligations Under the Income Tax Act, 1961
- Deadline for Advance Tax Payments: As per Sections 207-208 of the Income Tax Act, taxpayers with a yearly tax due over ₹10,000 must settle advance tax. If not already done, advance tax should be paid by March 31, 2024, to minimize interest charges. This date also marks the deadline for the full payment of advance tax for the fiscal year 2024-25 for individuals under sections 44AD/ADA.
- Implementation of Section 43B(h) from Finance Act 2023 on April 1, 2024: This section mandates prompt payment to micro and small enterprises within the agreed 15 or 45 days. Non-compliance for the financial year 2023-24 will lead to the denial of the related expenditure. Taxpayers are advised to promptly settle any dues with such enterprises to prevent financial discrepancies.
- Drafting Provisional Financial Statements: Taxpayers must prepare their tentative profit and loss accounts and balance sheets by March 31 each year. Comparing these provisional figures with the previous year’s results and the current year’s budgets is crucial for strategic planning.
- AIS/26AS Reconciliation: It’s essential to carefully reconcile TDS details by examining Form 26AS in the Annual Information System. If discrepancies are found, such as TDS deductions not reported in returns, follow-up is necessary. Also, verify that significant transactions, like buying or selling property over Rs 30 Lakhs, are accurately recorded in the AIS.
- Tax-Saving Investments Deadline: For those opting for the old tax regime, March 31, 2024, is the last day to make investments in avenues like LIC, PPF, ELSS, NPS, and charitable donations to avail deductions under various sections like 80C, 80D, 80G, etc., for the financial year 2023-24.
- PAN-Aadhaar Linking: Linking PAN with Aadhaar is compulsory, and failing to do so can lead to serious repercussions such as the inability to file tax returns, penalties, and even legal issues. An unlinked PAN might also become invalid, complicating financial dealings.
- Updated ITR Submission Extension: Taxpayers have until March 31, 2024, to file revised returns for the fiscal year 2020-21 (AY 2021-22). This extension benefits those who missed the initial filing deadline or must correct errors in their submitted returns.
- Planning for Long-Term Capital Gains: If there are any unrealized long-term capital gains as of March 31, 2024, consider selling investments strategically to limit gains to Rs 1,00,000 annually. This can help defer the gains and potentially reduce the tax liability.
Compliances under GST/Indirect Tax
- Annual Book Reconciliation for GST/TDS: All taxpayers must reconcile their accounting records with GST and TDS returns to identify and correct any discrepancies within the allowed time frame, avoiding significant losses. Essential reconciliations include matching GSTR-1 with GSTR-3B, aligning GSTR-1 with E-way Bills, and verifying Input Tax Credit (ITC) with various GST returns to ensure the accuracy of submitted GST returns and mitigate errors.
- GST LUT Submission for 2023-24: GST-registered taxpayers engaging in exports or supplies to SEZ Units are required to file a Letter of Undertaking (LUT) by March 31, 2024, effective for the period from April 1, 2024, to March 31, 2025. The LUT, submitted using Form RFD-11 on the GST portal, enables taxpayers to take advantage of export provisions in the upcoming fiscal year.
- Opting for the GST Composition Scheme (CMP-02) for FY 2024-25: The GST framework offers an option for eligible taxpayers to choose the Composition Scheme, simplifying compliance by eliminating the need for monthly returns. To switch to this scheme, taxpayers must file Form CMP-02 by March 31, 2024, making the scheme effective from April 1, 2024. Eligibility criteria include a turnover limit of Rs. 1.5 crore, an inability to charge GST from customers, forfeiture of ITC, and the obligation to pay taxes at a nominal rate while filing quarterly returns.
- Mandatory E-Invoicing for Certain Taxpayers: Starting April 1, 2024, businesses with a total turnover exceeding Rs. 5 crore during FY 2023-24 are mandated to generate electronic invoices for every transaction. This requirement aims to streamline tax administration and enhance compliance under the GST regime.
Conclusion
In conclusion, with the March 31, 2024, deadline fast approaching, Indian taxpayers must navigate through many critical tasks to ensure their financial and tax-related affairs are fully compliant. This includes but is not limited to, thorough reconciliation of accounting books with GST and TDS returns, timely submission of various declarations such as those for the Composition Scheme, and ensuring PAN is linked with Aadhaar. Ignoring these obligations could lead to financial penalties and operational hindrances. Therefore, it is crucial for all taxpayers to proactively and meticulously manage these responsibilities to maintain their financial health and adhere to the tax laws.
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