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Things Every Business Must Do Before Financial Year End

In India, Financial Year is from 1st of April to 31st March every year. Hence, 31st March is an important date by which important financial obligations should be judi online fulfilled.

It is important for those who are required to follow mercantile system to ascertain the transactions accrued up to 31st March and to properly record the same in the books of account. For the professionals who are mainly following cash system of accounting i.e. recording of the transactions on the basis of actual receipts and payments, the financial year end time line of 31st March is equally important as explained hereinafter.

Here is a checklist of 12 important activities every businessman should complete before 31st March 2018.

1) Calculate Payable Advance Tax

Income tax follows the principle of “Pay As You Earn”. Therefore during the financial year from 1st April 2017 to 31st March 2018 Advance Income tax was payable on or before 15th June 2017, 15th Sept 2017, 15th Dec 2017 and 15th March 2018. If an assessee has not paid at least 90% of his tax payable by way of advance tax on or before 31st March 2018, interest will start from 1st April 2018 till the month of the payment.

Hence an assessee should calculate his estimated taxable income as accurate as possible, calculate the tax liability and deduct the Tax Deducted at Source (TDS) to arrive at the total advance tax payable and pay the same before 31st March 2018. It is necessary that the advance tax paid should get credited to the account of central govt. before 31st March 2018 and should receive the challan serial number along with date of 31st March 2018 or before. A mere deposit before 31st March 2018 is not sufficient.

2) Make Investments To Save Tax

Make investments eligible for deductions under Chapter VI A. Subject to certain conditions, different types of assesses are entitled for deduction of specified amount from Gross total Income before arriving at the Taxable Income e.g. Individuals and HUFs are entitled for deduction u/s 80C of the Income Tax Act for a deduction up to an amount of investments of Rs. 1,50,000/- and an additional deduction of Rs. 50,000/- u/s 80 CCD for investments in National Pension Scheme (NPS) subject to certain terms and condition.

Further deductions on account of payment of premium for health insurance u/s 80D, donations u/s 35AC or u/s 80G are allowable only if the investment/ payment has been made on or before 31st March 2018.

3) Manage Physical Inventory

Take a physical inventory of Raw Materials, Work In Progress, Finished Good, Stores & Spares, Loose Tools, Consumables etc as on 31st March 2018. Also compile information of its market value as on 31st March 2018 which would be essential at the time of valuation to be adopted in the Balance Sheet as on 31st March 2018.