/ Corporate Updates

Yearend Compliance Perspective Checklist for 31st March

Year End Compliance Perspective Checklist for 31st March 2024

Year End Compliance Perspective Checklist for 31st March

The company must ensure that the required TDS, GST, ESI, and PF have been collected and paid. Checking the closing stocks as of March 31: The amount and item-by-item value of closing stocks as of March 31, 2024 are necessary for both tax audits and book closings. Here’s a summarized checklist of the key deadlines and compliance requirements for taxpayers for the financial year :

Income Tax:

  • Investment for Deductions: Make necessary investments eligible for deductions to reduce taxable income for FY 2023-24 (e.g., PPF, LIC, ELSS Mutual Funds, Health Insurance).
  • Calculate and Pay Advance Tax: Calculate tax liability and pay any necessary advance tax.
  • Updated Income Tax Return for FY 21-22: Last chance to file an updated income tax return for FY 20-21 by paying 50% additional tax.
  • Updated Income Tax Return for FY 21-22: Last chance to file an updated income tax return for FY 21-22 by paying 25% additional tax; thereafter, the additional tax increases to 50%.
  • Ensure that all TDS and TCS credits are properly accounted for in the books of accounts.
  • Compliance with Section 43B(h) : Timely Payment to Micro and Small Enterprises: : Ensure timely payments to Micro and Small Enterprises within 45 days/15 days as applicable.
    • Payments must be made within 15 days in the absence of a written agreement.
    • Payments must be made within 45 days if a written agreement exists.
  • TDS and TCS Provisions: If turnover for FY 2023-24 exceeds Rs. 10 Crores, TDS provisions under section 194Q and TCS provisions under section 206C(1H) will become applicable for FY 2024-25.
  • Declarations from Transporters: Obtain declarations from transporters for non-deduction of TDS under section 194C.
  • TDS and TCS Provisions- Turnover Exceeding Rs. 10 Crores: Reconcile and account for TDS and TCS credits in books of accounts.
    • For FY 2023-24, if turnover exceeds Rs. 10 crores and purchases exceed Rs. 50 lakhs, TDS provisions under section 194Q apply for FY 2024-25.
    • If TDS is not deducted by the purchaser, TCS under section 206C(1H) will apply, and the seller must deduct it.
  • Declarations and Reconciliation: Obtain declarations from transporters who own 10 or fewer vehicles to avoid TDS under section 194C.

Goods and Services Tax (GST):

  • Letter of Undertaking (LUT): File LUT for FY 2024-25 for exports of goods/services or supplies to SEZ units/developers without payment of IGST.
  • Opt for Composition Scheme: Apply to opt for the composition scheme for FY 2024-25.
  • GTA Services Providers Declaration: File a declaration for opting to pay tax under the forward charge mechanism for FY 2024-25. Recipients should maintain records of such declarations from GTA to justify non-payment of tax under reverse charge mechanism.
  • E-Invoice Generation: If turnover for FY 2023-24 has exceeded Rs. 5 Crores for the first time since the inception of GST, generate and issue E-Invoices for supplies from 01st April, 2024.
  • Reverse Input Tax Credit: Reverse input tax credit availed on transactions where payments to creditors are due for more than 180 days.
  • New Invoice Series: Start a new invoice series from 01st April, 2024, unique for FY 2024-25.
  • Reconcile GST Data: Reconcile data filed in GST returns with books of accounts and pass necessary entries (e.g., reconcile turnover, match balance in Electronic Credit/Cash Ledger with books, adjust ITC available in books but not in GSTR-2B, reverse excess ITC claimed, discharge RCM liability if missed during the year).
  • Reconcile GST-TDS and GST-TCS Credits: Reconcile and account for GST-TDS and GST-TCS credits in books of accounts.

Reconciliation & Matching (Books vs GST Returns)

  1. Match GSTR-1 vs GSTR-3B (Outward supply)

  2. Match Books vs GSTR-1

  3. Match Books vs GSTR-3B

  4. Match Books vs GSTR-9 (Annual Return)

  5. Reconcile Input Tax Credit (ITC): Books vs GSTR-2B

  6. Identify mismatches in credit notes/debit notes

  7. Cross-check e-Invoice data vs GSTR-1

Input Tax Credit (ITC) Review

  1. Ensure ITC claims are within time limits (section 16(4))

  2. Reverse ineligible ITC (personal use, exempt supplies, blocked credits)

  3. Review ITC claimed under Rule 42/43 (mixed-use inputs/capital goods)

  4. Check reversal of ITC on non-payment to vendors within 180 days

  5. Verify import ITC and cross-check with ICEGATE data

  6. Avail missed ITC, if eligible, in time before the due date

  7. Match ITC claimed in books vs GSTR-2B (monthly)

Outward Supply Review

  1. Verify correct classification of goods/services (HSN/SAC codes)

  2. Check correct GST rates applied across products/services

  3. Revalidate taxability of composite/mixed supplies

  4. Review advance received and adjusted in returns

  5. Check reverse charge mechanism (RCM) compliance

  6. Ensure export invoices are correctly declared with LUT

  7. Match e-way bills with GSTR-1

Return Filing & Finalization

  1. File all monthly/quarterly GSTR-1 and GSTR-3B up to March 2025

  2. Verify GSTR-9 (Annual Return) accuracy

  3. File GSTR-9C (Reconciliation Statement) if turnover exceeds threshold

  4. Ensure filing of GSTR-10 (Final Return) if business was closed

  5. Check for any late fees or interest payable

  6. Pay pending tax dues, interest, and penalties

  7. Download & archive acknowledgments and challans

Vendor & Customer Ledger Clean-up

  1. Obtain missing invoices from vendors

  2. Send out reconciliation statements to customers

  3. Ensure debit/credit notes are issued for adjustments

  4. Verify GSTIN of vendors and customers

Special Considerations

  1. Review job work compliance (Form ITC-04)

  2. Review transactions under SEZ or deemed exports

  3. Check cross-charge between branches (distinct persons)

  4. Reconcile RCM liabilities and payment under cash ledger

  5. Ensure interest and penalty accounting in books

Master Data & Registration Updates

  1. Validate GST registration details (email, mobile, address, bank)

  2. Update changes, if any, with Amendment Application

  3. Ensure HSN summary is maintained in books

Financial Statement Linkage

  1. Match turnover in GST returns with audited financials

  2. Ensure tax liability matches P&L ledgers

  3. Prepare year-end audit trail for GST audit or departmental scrutiny

Others:

  • Year-End Provisions: Make necessary year-end provisions, including depreciation and amortization.
  • Verify Balances: Verify closing stock, cash balance, bank balance, and inter-branch balances.
  • FD Statements and Interest Income: Collect FD statements from the bank and account for interest income.
  • Statutory Compliances: Double-check statutory compliances on all transactions (e.g., TDS, TCS, RCM).
  • Foreign Exchange Fluctuations: Account for foreign exchange fluctuations.
  • Balance Confirmation: Obtain balance confirmation with third parties.

This checklist ensures that all critical financial and compliance tasks are completed before the financial year-end, minimizing potential issues and optimizing tax benefits. By adhering to Above checklist, taxpayers can ensure compliance with the applicable tax laws and deadlines, thereby avoiding penalties and interest charges

Conclusion

As March 31st, gets Completed, it’s super important for taxpayers and registered businesses to make sure they are following all the rules and provisions for smooth business operations. Whether it’s paying advance taxes, following Section 43B(h) rules, doing your annual book checks, or sorting out your GST paperwork, each task is really important. By doing these things properly, individuals and businesses can ensure they’re staying on the right side of the law and avoiding any trouble or extra costs.

So, it’s crucial for everyone to complete these tasks before the deadline to maintain compliance. This article is intended for informational and educational purposes only. However, it is advisable to consult with a tax professional for specific issues and challenges.

**********************************************************

If this article has helped you in any way, i would appreciate if you could share/like it or leave a comment. Thank you for visiting my blog.

Legal Disclaimer:
The information / articles & any relies to the comments on this blog are provided purely for informational and educational purposes only & are purely based on my understanding / knowledge. They do noy constitute legal advice or legal opinions. The information / articles and any replies to the comments are intended but not promised or guaranteed to be current, complete, or up-to-date and should in no way be taken as a legal advice or an indication of future results. Therefore, i can not take any responsibility for the results or consequences of any attempt to use or adopt any of the information presented on this blog. You are advised not to act or rely on any information / articles contained without first seeking the advice of a practicing professional.