Key tax and GST tasks to complete before March 31
What's the story
As the financial year comes to an end, March 31 becomes a crucial deadline for individual taxpayers and businesses. From locking in deductions to ensuring compliance, this date marks the last chance for several tax-related actions. Failing to meet these deadlines could result in higher tax outgo, penalties, or delayed refunds. Here's a look at some of the key tasks you need to complete before March 31.
Investment deadline
Section 80C investments due March 31
If you're sticking to the old tax regime, March 31 is your last date to make deductions under Section 80C. This includes investments in instruments like Public Provident Fund (PPF), Sukanya Samriddhi Yojana (SSY), and National Pension System (NPS). These need to be completed and credited by the deadline to qualify for the current financial year. Delays will push these benefits into next year.
Documentation requirement
Submit proofs to avoid higher TDS
Employees who have declared their tax-saving investments must submit supporting documents to employers within the payroll cut-off. Not doing so could lead to higher tax deducted at source (TDS) in the last salary cycles of the year. This would affect short-term cash flows, even though refunds can be claimed later.
ITR-U deadline
File updated return for AY 2021-22
March 31 is also the last date to file an updated income tax return for assessment year 2021-22. This provision lets taxpayers correct omissions or under-reporting of income. While it comes with additional tax and penalties, it can help avoid stricter scrutiny or larger liabilities later on.
Tax optimization
Adjust gains against carried forward losses
Taxpayers should consider reviewing their portfolios to optimize capital gains tax. Adjusting gains against carried-forward losses before the year-end can help reduce overall tax liability. This strategic move ensures that taxpayers make the most of their investments while minimizing their tax burden.
Tax reduction
Apply for Form 13 certificate
Taxpayers eligible for reduced tax deduction can apply for a lower or nil TDS certificate (Form 13) before the new financial year begins. This ensures that lower withholding rates apply from April onwards. It's an important step to ensure you're not paying more tax than necessary on your income.
Asset utilization
Use capital assets before March 31
Businesses should ensure that any capital assets they intend to claim depreciation on are put to use before March 31. Only those assets that are operational within the financial year qualify for depreciation benefits. This is a crucial step in ensuring businesses get their due tax benefits and avoid any potential penalties for non-compliance.
Compliance requirements
Reconcile GSTR returns and ITC claims
Businesses should reconcile GST filings—GSTR-1 and GSTR-3B—with financial records and GSTR-2B. Any discrepancies must be identified and corrected in the March returns to avoid future notices. A detailed review of input tax credit (ITC) claims is also essential to ensure eligibility and proper documentation. Any ineligible or blocked credits under Section 17(5) should be reversed if incorrectly claimed.