Taxpayers follow March end Rule Otherwise you may be an April Fool
Dear Friends, the last month of Financial Year 2014-15 March is running through and only few banking days left. Everyone is in haste due to March/Year end financial and tax planning.
So at this juncture, WHAT ALL OF US SHOULD BEING A TAXPAYER, DO BEFORE 31ST MARCH, SO THAT WE WILL NOT BECOME AN APRIL FOOL IN THE TAX PLANNING IN COMING APRIL???
As you all are aware that the month of March is very important for all Taxpayers. In our Country, the Financial Year is from April to March is applicable for all Tax Laws. That’s why Books of Accounts are made for the period of April to March and it is the custom for Taxpayers to follow all the Tax laws at year end and has to maintain all books of Accounts. Tax planning in advance will be more beneficial; if it is delayed then taxpayer may get trapped in them.
What all should we as an Income Taxpayer do before 31st March?
There are some of the provisions of Income tax are applicable to all the Taxpayers and proper decision have to be taken before 31st March. Some of these provisions are as follows:
- If in income tax deduction u/s 80 have to be claimed for the tax benefits, then we should verify the limits of income tax and our tax liability and should invest, donate, etc. before 31st March accordingly.
- We can also avail deduction u/s 80C in current year by making Investment in the “Sukanya Samruddhi Scheme” as mentioned in Financial Budget. (Maximum Deduction under section 80 C, 80 CCC, 80CCD is Rs.1.5 lakhs).
- We can avail deduction u/s 80G by giving donation to “Swacch Bharat Kosh” or “Clean Ganga Fund” in current year also.
- Salaried Employee should give the details of Investments and deductions to Employer so that less TDS will be deducted in March month.
- If any one of us has not paid Advance Tax before 15th March then it should be paid before the 31st March so that less interest will be levied.
- Every Taxpayer should download Form 26 AS and verify TDS deducted. Similarly, taxpayer should also verify Income as mentioned in 26 AS with Books of Accounts. If there are differences then they need to be rectified.
What should be done by VAT, Service Tax, Professional tax, Taxpayer before 31st March?
We, while doing business, have to follow all the Tax laws prevailing in our country and state. Taxpayer has to follow following tax laws before 31st March:
- Sales tax department has made available Dealer Information System on the website. Every Taxpayer should verify his information in that such as miss match report, Return Filed, tax paid etc. and if differences arise in the same then it should be rectified. Herein the mis-match report is the most important. In this report the differences between purchases made by the taxpayer and Sales shown by the Supplier is mentioned. There may be many reasons for the mis-match. Taxpayer should reconcile this otherwise he has to pay extra taxes to Sales Tax Department.
- If the taxpayer has deducted the Profession tax of the employees employed by him, then he has to pay and file return of Profession Tax for the period of March to February before 31st March.
- The last date for depositing Service Tax to a Company Assessee for the Month of March and other Taxpayers for the period from January to March is 31st March. So all the Taxpayers should reconcile the Services and RCM along with the Bills provided by them and should pay Service tax before 31st March.
What should be done by us in Business and profession we are carrying before 31st March?
To have transparency in the books of Accounts, to understand the turnover of the year, profit and loss, etc. following things should be done:
- Closing Stock: In Business world Profit & Loss account has great importance. Closing Stock is the base of this Profit and Loss account. Every Businessman has to count his stock at the year end and should verify stock counting with the stock as shown in the Books of account. If differences occur in the same then he should rectify the Books of Account. After this Stock Valuation should be done applying the proper methods. This value helps in calculating Profit or Loss but is also helpful for Cash credit with Banks, for Insurance and many more.
- Taxpayer should reconcile the Debtors and Creditors. That means Taxpayer should verify his books of Accounts with Balance Confirmation Statement provided by them.
- Bank and Loan Statement Reconciliation: Taxpayer to reconcile Bank and Loan Statement with Books of Accounts at the year end.
- After doing all the above mentioned things we should also prepare projected and Comparative Balance Sheet and Profit and Loss Account so that taxpayer can compare previous Year’s Turnover, Profit or Loss with current year. By considering figures of previous year and current year decisions in respect of increasing income and reducing expenditure can be taken. Further financial planning for next year can be done.
What one can learn from March end planning?
There should be checklist of March end; every taxpayer should follow it. In this busy life one has to do many things in business in a short span of time of March end. The mistake in the accounting of previous year creates troubles in the next year. Similar to construction work, if there is a mistake in the first floor then it becomes problematic for 2nd floor also. Taxpayer should settle the transactions on time otherwise it may become difficult for the taxpayer. Taxpayer should properly handle March end Tax Planning “Tool” which should be as per Tax “Rule’ otherwise he may become a “Fool” in the in April i.e., in next financial year.
Hope you will consider the same and will not be April Fool