The end of the financial year 2020-21 is approaching soon. There are a few tasks that one needs to perform before the 31st March, 2021. There are many financial obligations as well that needs to be done with before the deadline in order to avoid last minute rush and most importantly penalties.
So, here’s a quick checklist of tax related tasks you need to finish before end of Financial Year closing on 31st March, 2021.
ü Filing of belated and revised income tax return
31st March is also the end of the assessment year 2020-21. Therefore, it is the last date for filing revised or belated return for FY19-20.
An income tax return (ITR) filed after the due date is called late or belated return. In case you have filed your ITR but want to make any changes in it, you can file a revised return. The deadline for filing revised as well as belated return is the 31st March of the assessment year.
Note : One should remember that, if this deadline of 31st March is missed then you will not be able to file revised or belated ITR for financial year 2019-20.
ü Payment of Advance tax
Any person (except for senior citizens) without any professional income whose estimated tax liability for the year is more than ₹10,000 a year is liable to pay advance tax in four instalments before July 15, September 15, December 15 and March 15.
15th March is the deadline for paying the fourth installment of the advance tax for financial year 2020-21 including the advance tax by those individuals who are covered under the presumptive taxation scheme under sections 44AD and 44ADA.
Note : If the tax is not paid on or before the deadline, the taxpayer is charged 1 percent interest per month for deferment in instalment and 1 percent interest per month if only 90 percent of the total amount is paid before the end of the FY.
ü Linking of Aadhar with PAN
It must be noted that the return of income tax payer will not be processed if Aadhaar is not linked to PAN by 31st March, 2021, moreover, penalty will be imposed.
Note : If linking PAN with Aadhaar is not done then it will lead to PAN becoming inoperative and the PAN card holders could be fined with a penalty of Rs. 10,000/-
ü Calculation of GST Turnover
The total turnover in your Current year up to 31st March is to be calculated for the purpose of determining the aspects like applicability of GST Registration, Eligibility of opting Composition Scheme, and Applicability of Filing of specific returns.
ü Calculation of Deductions
There is a certain investment that is exempted from taxable income. These are investments done under section 80C, 80D, 80G, Section 24, etc.
For example, the most common and widely used exemption is section 80C. Under this section, the taxpayer will get the tax exemption for up to ₹ 150000. There are various investment avenues like PPF, PF, LIC premium, Home loan capital amount, Tuition fees, ELSS mutual funds and so on.
Calculate the amount that it should reach to its capping level of ₹ 150000 in order to get the tax exemption on your investment.
This investment needs to be done on or before 31st March 2021 in order to get it eligible for the tax exemption.
ü Investment strategies to claim deductions
Calculate your total income from all sources (including interests on savings bank balance, bank deposits and capital gains). If it is above Rs. 5 lakhs by a small amount, you still have time to bring it down. Donations to specified organizations, purchase of medical insurance for self, family and parents and contributions to the NPS are eligible for tax deductions.
So, plan your investments accordingly in order to avoid tax payments.
ü Minimum Investment under PPF
The minimum compulsory annual contribution to PPF account is Rs. 500. So if you have PPF Account then you need to contribute at least Rs. 500 per financial year. The last date of this contribution is 31st March, 2020.
ü Salaried employees to claim reimbursements
Salaried individuals are entitled to certain reimbursements on the basis of their salary structure such as medical reimbursements, Telephone, leave travel, house rent allowance etc. To claim such tax exemption, such persons need to submit the proof of such expenses to their employers.
ü Manage Professional Income & Expenses
In respect of professionals following cash system of accounting, business expenses are allowed to be deducted only if they are actually paid on or before 31st March 2021. Hence, it is advisable to make payments of all business expenses related to the period up to 31st March 2021 on or before that date.
Professional ReceiptsIn respect of professionals following cash systems of accounting, deposit all professional receipts in bank account before 31st March 2021 without pushing it into the next financial year. This is because the payer must have deducted TDS on the same and will file TDS Return by showing the amount paid to you along with corresponding TDS.
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