12 important things to do before the Financial Year ends

Last Updated at: Nov 04, 2019
12 important things to do before the Financial Year ends

When the end of the financial year approaches, you must take care of some crucial tasks. If you are a business owner, then the significance of these tasks increases substantially. Calculation of your advance taxes along with investments to save some taxes will keep you in an excellent stead for the times to come.

Financial year in India is from the 1 April to 31st March each year. Consequently, 31st March is a critical date for business to ensure all the essential finance-related commitments are met, important decisions are taken and other mandatory things.

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It is essential for the individuals who are required to pursue a trading system to find out the transactions accumulated up to 31st March and to appropriately record the equivalent in the account. For the experts who are essentially following money system of bookkeeping i.e. recording of the exchanges based on bona fide receipts and expenses, the financial year-end deadline of 31st March is similarly critical as clarified further on this article.

Here are 12 important exercises every businessman should do before 31st March 2019.

1)  Calculate to be paid advance tax

Income tax abides by the guideline of “Pay As You Earn”. Accordingly throughout the financial year from first April 2018 to 31st March 2019 Advance Income duty was due at the latest 15 June 2018, 15 September 2018, 15 December 2018 and 15 March 2019. In the event that an assessee has not paid at any rate 90% of his expense payable by a method for development charge at the very latest 31st March 2019, interest will begin from 1 April 2019 till the stretch of the payment.

Subsequently, an assessee ought to ascertain his evaluated assessable pay as exact as could be expected under the circumstances, compute the expense obligation and deduct the Tax Deducted at Source (TDS) to touch base at the complete advance tax payable and pay the equivalent before 31st March 2019. It is vital that the advance tax rewarded ought to get credited to the bank account of central govt. before 31st March 2019 and ought to get the challan sequential number alongside date of 31st March 2019 or sooner than that.

2)  Make investments to save tax

Investments have to be made in such a way to save from taxes. Related to specific conditions, different kinds of estimation are acceptable for subtraction of indicated sum from gross income before attaining at the taxable income, for example, a person and HUFs (Hindu Undivided Family) are permitted for tax deduction u/s 80C of the Income Tax Act for a subtraction up to a measure of ventures of Rs. 1, 50,000/ – and an extra derivation of Rs. 50,000/ – u/s 80 CCD for interests in National Pension Scheme (NPS) concerned to specific terms and condition.

Additional deductions related to reimbursement of premium for health insurance u/s 80D, donations u/s 35AC or u/s 80G are permissible only if the investment or the payment have been made on or before 31st March 2019.

3) Manage physical stock

Take a physical stock of raw materials, work in development, refined good, provisions and supplies, movable tools, and consumables and so on as on 31st March 2019. Likewise, assemble data of its fairly estimated worth as on 31st March 2019 which would be fundamental at the season of valuation to be received in the statement of the financial position of the business as on 31st March 2019.

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4) Purchase of fixed resources for business

Buy resources for case devaluation (half of the determined rate of depreciation). In case of any substantial or immaterial fixed resource has been acquired with the end goal of business amid the earlier year and is put to use with the end goal of business or occupation for the time of 180 days or more, the deduction will be permitted at the rate recommended for that sort of resource.

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

So, if you want to buy any fixed resource with the end goal of utilization in the business, buy it and put it to use for business purposes prior to 31st March 2019 in order to benefit deduction of drop at the rate of half of the ordinary rate of devaluation.

5) Claim extra reduction an incentive

For the industrialized unit, you can buy resource claim additional devaluation. In regard of new plant and hardware bought and set up after 31st March 2018 by an assessee occupied with the matter of assembling or creation, extra devaluation of 20% of the real expense of the plant and apparatus will be permitted as deterioration subject to specific terms and conditions. In case such plant and hardware are acquired and put to use for under 180 days, extra devaluation would be permitted at the rate of 10% subject to certain different terms and conditions.

Hence, an industrialized unit can profit this extra derivation of devaluation by obtaining plant and hardware and putting it to use at the latest 31st March 2019. Certain classes of evaluates are qualified for subtraction of incentive at 15 % for securing of new plant and apparatus before 31st March 2019.

6)  Find out capital gains

In case an assessee has assessable capital increases amid the financial year 2017-18, he or she can endeavor to distinguish his or her capital resources, particularly shares, mutual funds, and so on, which if sold amid the budgetary year, will result in a capital misfortune, he or she can deal with such resources at the latest 31st March 2018 and book a capital misfortune which will set off against the assessable capital profit and subsequently will lessen or invalidate the capital gains tax. As an issue of arranging a similar capital resource can again be bought at the very latest 31st March 2019 and kept in custody.

7)  Account for unabsorbed capital fatalities

In case an assessee has a carried forward capital loss pertinent to the AY 2011-12 i.e. before 8 evaluation years, which couldn’t be completely set off against Capital Gain for the AY 2011-12 to 2018-19, it will lapse in the event that it couldn’t be set off against the Taxable Capital Gain for AY 2019-20.

Subsequently, if the assessee has a probability of having assessable Capital Gain for the financial year 2018-19, he ought not to delay it to the following year, yet book the increase prior to 31st March 2019 in order to set off the Capital loss of AY 2011-12 against the Capital Gain for AY 2018-19.

8) Clearout your loan accounts

Confirm credit records and clean them up if important. On the off chance that an assessee has given or taken any impermanent credits or loans, or an outstanding, repay or recoup the equivalent at the latest 31st March 2019. This will help in refining the balance sheet situation of the proportion of benefits and liabilities, debt-equity ratio and so forth. Temporary loans can be again given or taken on or after first April 2019.

9) Manage occupational income & expenditure

In regard to occupations following in hand cash system of bookkeeping, costs of doing business are permitted to be deducted just in the event that they are really paid at the latest 31st March 2019. Henceforth, it is fitting to make payments of all costs of doing business identified with the period up to 31st March 2019 or before.

Occupational receipts: In regard to working professionals following cash systems of accounting, put down every professional receipt in a bank account before 31st March 2019 without any fail or further delay to the next financial year. This is for the reason that the payer should have deducted TDS on the equivalent and will file TDS return by confirming the sum paid to you alongside related TDS.

10) File income tax return

Time without return for AY 2017-18 and AY 2018-19: 31st March 2019 is the last date to document pending income tax returns for the budgetary year of 2016-17 and budgetary year 2017-18. It’s vital to keep your income tax returns updated.

11) Calculate GST turnover

Organizations which are not yet under the GST registration a maximum of Rs.20 lakhs should monitor their turnover. The overall turnover up to 31st March is to be evaluated to determine the critical viewpoints like relevancy of GST registration, eligibility of picking composition scheme, and eligibility of filing of explicit returns.

12)  Settle GST records

GST payments are done either by means of duty credit or through challan instalments. The citizens ought to accommodate the cash ledger or record, credit ledger and liability ledger on GSTN gateway with their books of records. Every one of the submissions ought to be done before the year-end. Further, credit notes, debit notes, rate distinction, rebate, and so on likewise ought to be accommodated.

It is constantly incredible to keep these exercises convenient amid the financial year end proceedings. Superior accounting software can enable you to get ready in a better way for the coming monetary year with the goal that you can maintain a strategic distance from the last moment pressure.

It is safe to say that you can land in serious trouble if you do not fulfill your tax obligations before the allocated period. Calculation as well as settlement of taxes such as GST and Luxury tax among others is important for the management of all business organizations. Please do not take them lightly.