Home 10 THINGS TO DO BEFORE 31ST MARCH, 2024

10 THINGS TO DO BEFORE 31ST MARCH, 2024

 

As the Financial Year 2023-24 draws to a close, taxpayers are immersed in finalizing their accounts and ensuring compliance with various tax regulations. Here are the essential tasks taxpayers must remember before 31st March 2024.

1.  MAKE INVESTMENTS TO SAVE TAX

Investing in order to save on taxes is always a wise decision. There are various types of investments that can help you save taxes under different sections of the Income Tax Act. Some of these investments are:-

  • Section 80C investments: Under section, investments of up to ?1,50,000 per annum in certain instruments are eligible for tax deduction. Some popular investment options under Section 80C are:
    • Public Provident Fund (PPF)
    • Equity Linked Saving Scheme (ELSS)
    • National Pension System (NPS)
    • Tax-saving fixed deposits (FDs)
    • Senior Citizen Savings Scheme (SCSS)
    • Sukanya Samriddhi Yojana (SSY)
  • Section 80D investments: Under this section, investments in health insurance premiums of up to Rs. 25,000 for self and family and Rs. 50,000 for senior citizens are eligible for tax deduction.
  • Section 80E investments: Under this section, investments in education loans are eligible for tax deduction. The entire interest paid on an education loan is deductible from taxable income.
  • Section 80TTA investments: Under this section, investments in savings accounts are eligible for tax deduction. Interest earned on savings accounts up to Rs. 10,000 per annum is deductible from taxable income.
  • Section 80G investments: Under this section, investments in certain charitable organizations are eligible for tax deduction.

 

2.  CALCULATE & PAY ADVANCE TAX

Any taxpayer having liability of over Rs. 10,000 is required to pay Advance Tax. Advance Tax is to be paid in 4 instalments, with the last one being to deposit 100% of advance tax by 15th March, 2024. If this date has been missed, it is recommended to pay before 31st March, 2024. This ensures that the interest charged on failure or delay in advance tax payment is minimal.

 

3.  LINK YOUR PAN WITH AADHAAR

Linking your PAN with Aadhaar is mandatory as per the Indian Income Tax Department's rules. Failure to link PAN with Aadhaar can lead to the following consequences:

  • Inability to file Income Tax Returns: If you do not link your PAN with Aadhaar, you may not be able to file your Income Tax Returns (ITR). This can result in an interest, penalty, late fees and even legal action.
  • Invalid PAN: If you fail to link your PAN with Aadhaar, your PAN may become invalid. This can cause problems when you need to use your PAN for various financial transactions.
  • Inability to carry out financial transactions: If your PAN becomes invalid, you may not be able to carry out financial transactions such as opening a bank account, applying for a loan, or buying/selling property.

 

4.  CALCULATE YOUR CAPITAL GAINS

The calculation of capital gains is an important aspect of income tax planning, especially for those who have sold capital assets such as stocks, mutual funds, property, or gold during the financial year.

Here are some reasons why you should calculate your capital gains before 31st March in India:

  • Tax Planning: Calculating your capital gains before 31st March can help you plan your tax liabilities better. If you have incurred capital losses during the financial year, you can offset them against your capital gains and reduce your tax liability.
  • Filing Tax Returns: If you have sold any capital assets during the financial year, you are required to report the capital gains or losses in your income tax returns. Calculating your capital gains before 31st March can help you file your tax returns on time.
  • Record Keeping: Calculating your capital gains before 31st March can help you maintain accurate records of your capital gains and losses. This can be useful for future reference and tax planning.

Note: On capital assets, especially shares, Mutual funds, etc. which if sold before 31 Mar will lead to Rs 1 Lakh exemption on LTCG and set off against profits will result if there is a capital loss.

 

5.  FILE UPDATED ITR FOR FY 2020-21

If any taxpayer has not filed income tax return for FY 20-21 or has discovered that there is an error in his return, you still have one opportunity to correct the return and file the return that has not been filed yet. You have a chance to file the updated return for the financial year 2020-21 before 31st March 2024. You will have to pay additional tax and interest. If someone has not yet filed his return then he will have to pay a nominal penalty and can file his income tax return.

 

6.  FILE TDS ON CRYPTO P2P TRANSACTIONS DONE ON INTERNATIONAL EXCHANGES

The Indian Government has introduced a new provision called Section 194S under Budget 2022, which mandates the deduction of TDS at a rate of 1% on the transfer of crypto currency and other Virtual Digital Assets (VDAs) if the aggregate value exceeds INR 10,000 during the financial year. This provision is effective from 1st July 2022 and not 1st April 2022.

Additionally, according to the new tax laws proposed in BUDGET 2024, one may attract a penalty under Section 271C of the Income Tax Act if trying to avoid TDS by using offshore or non-compliant platforms.

With introduction of Crypto TDS penalty in Budget 2024, all crypto traders need to take the TDS deductions and its timely payments very seriously. This includes those who are trading on international crypto exchanges and P2P platforms, otherwise it can lead to hefty interest & penalty and maybe even JAIL sentence.

 

7.  CALCULATE GST TURNOVER

Businesses which are not yet under the GST registration limit, should keep track of their turnover. The total turnover up to 31st March is to be calculated for the purpose of determining the important aspects like applicability of GST Registration, Eligibility of opting Composition Scheme, and Applicability of Filing of specific returns.

 

8.  RECONCILE GST LEDGERS

  • Reconciliation of Outward Liability: The taxpayers shall reconcile their outward tax liability between GSTR 1, GSTR 3B & Books and shall account for any differences or amendments in the March 2024 return.
  • Reconciliation of Input Tax Credit: Taxpayers should reconcile the ITC claimed in GSTR 3B with GSTR 2B and their books, identifying any parties who have not filed their GSTR 1 or reported transactions during the FY. They should follow up with these parties to ensure ITC appears in March 2024’s GSTR 2B. Additionally, calculate and reverse any ITC due to Rule 42, 43 (Blocked Credit, Exempt Supplies), or payments to suppliers not made within 180 days, including any applicable interest.
  • Payment of RCM: Taxpayers shall recalculate their total RCM liability for the year and shall discharge the same along with interest in their March GSTR 3B return to avoid tax recovery notices in future.
  • All the exporters or who supplies goods or services to SEZ without payment of GST should apply for LUT in form GST RFD 11 for FY 2024-25.
  • Composition Scheme, QRMP (Scheme) & E-invoicing: The taxpayers shall assess their turnover and input tax credit for the year, and shall decide as to if they want to opt for Composition Scheme (Turnover Limit 1.5 Crore) or Quarterly Return Monthly Payment Scheme (Turnover Limit 5 Crore) for the next financial year. If the turnover of any taxpayer has for the first time exceeded Rs. 5 Crore in the Financial Year 23-24 then he shall generate e-invoices for all his B2B and export supplies from 1st April 2024.

9.  PURCHASE OF FIXED ASSETS FOR BUSINESS OR PROFESSION

Purchase asset to claim depreciation (half of specified rate of depreciation). If any tangible or intangible fixed asset has been purchased for the purpose of business during the previous year and is put to use for the purpose of business or profession for the period of 180 days or more, depreciation will be allowed at the percentage prescribed for that kind of asset.

If the asset has been put to use for the purpose of business or profession for the period less than 180 days in that previous year, the depreciation shall be restricted to 50% of the amount calculated at the prescribed percentage.

Hence, if you are planning to purchase any fixed asset for the purpose of use in the business, purchase it and put it to use for business purposes on or before 31st March so as to avail deduction of depreciation at least at the rate of 50% of the normal rate of depreciation.

 

10.  SUBMIT FORM 12B TO YOUR EMPLOYER

If you have changed jobs during the financial year, then it is important to submit form 12B to your current employer. Form 12B is a statement that provides details of an individual's income earned from different employers during the same financial year. It is typically used when an individual switches jobs within the same financial year.

Form 12B includes details such as the employee's name, PAN number, previous employer details, income earned, tax deducted at source (TDS), and other relevant information. It is an important document for both the employer and the employee, as it helps ensure that the correct amount of tax is deducted at source and that the employee's tax liability is accurately calculated.

Form 12B needs to be submitted to the new employer within a certain period of time after joining. If an employee fails to submit Form 12B, their tax liability may not be accurately calculated.

 

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