Before Every Financial year 31st March

Before Every Financial year 31st March

Financial year

All the big business establishments and small businesses equally maintain balance sheet and income statement which gives them an idea and record of their income and expenditure. This balance sheet and income statement is maintained for one year.

So, the one year in which these businesses earn income is known as Financial / Fiscal year. Government levies taxes and these taxes are paid in the next year after the financial year ends. The next year in which income is assessed to tax is known as the Assessment Year. For example, if Apr 1st 2011 to Mar 2012 is the Financial Year then the Assessment Year would be year 2012-2013.

Before Every Financial year 31st March
Before Every Financial year 31st March

This trend is followed by many other countries other than India. Countries like Canada, UK, Japan and Hongkong follow this trend. India follows this trend because of British rule. Britishers ruled India for 150 years. After adopting Gregorian calendar, they followed April to March rule.

General Things in General Life

As they followed this time period, Indians also automatically followed this period as they also felt that it would be good if they follow this time period as the crops harvesting time is also in April and as there are many festivals during September and October it would be difficult to close books of accounts.

Things that need to be done before Mar 31st

1. Calculation of Payable advance tax should be done.

Before Every Financial year 31st March
Before Every Financial year 31st March

Advance tax is paid to the Government before mar 31st that is the first rule of income tax. An assessee should pay advance tax by calculating his estimated taxable income as exact as possible. Advance tax is calculated by deducting Tax deducted at Source (TDS) from tax liability and this amount has to be paid to the Government before 31st March.

Types of people we come Across in Train

There is a rule that unless 90% of the tax payable if not paid to Government before 31st then the interest will start from April which will last till the amount is paid. When the amount is credited to the Government they give a challan which has a serial number.

2. Saving tax by making investments.

Before Every Financial year 31st March
Before Every Financial year 31st March

One can do some investments to get deductions in tax. Investing in schemes such as National Pension Schemes one can get deductions of Rs 150000 in addition to that Rs50000 deduction. Individuals and HUFs can avail this deduction under the 80(c) act of income- tax.

There are other deductions under 80(d) act of income tax if one is paying premium of health insurance and for donations made under 80(g) can be availed by the investors. But this one can get benefit only if the payments are made before 31st Mar.

Certain things spread quickly, but recover slow

3. Management of physical inventory.

The company has to manage its physical inventory as on 31st Mar. Physical inventory like raw materials, finished goods, work in progress etc have to be valued as per the market value so that it can be included in the balance sheet on 31st March. For this reason, we haven’t changed our budget timing because during Sep and Oct months lots of festivals are there and it is difficult to keep a record of inventory as it is moving fast.

4. Purchasing Fixed assets for business purpose.

Before Every Financial year 31st March

Fixed assets are entitled to depreciation. There is depreciation rate fixed by government. One can claim depreciation on its fixed assets that is half of specified rate of depreciation. If a company is purchasing tangible or intangible fixed assets for its business purpose and puts it in use before 31st March then it can avail the depreciation benefit for its asset.

Why Should take a break from our mobile phone

If the fixed asset is used more than 180 days then the depreciation rate can be availed which is specified. If the asset is used less than 180 days then the company can avail 50% of the amount. If the company is selling its fixed assets then it should delay the deal till 1st April so that it can earn the depreciation benefit.

5. Additional depreciation and incentive to be claimed.

Before Every Financial year 31st March
Before Every Financial year 31st March

One can avail the benefit of additional depreciation on the new machinery or assets purchased by the manufacturer. This mostly applies to the manufacturers who purchase new machinery for their plant. Sometimes new plant has to be bought with machinery so they can avail this benefit.

If the installation of the machinery and is put to use less than 180 days then the manufacturer can earn 10% additional rate. Other than that, anyways the manufacturer will get benefit of 20% of the actual cost of plant and machinery if purchased on or before 31st Mar.

Celebrity things impact on Society

6. Identify capital gains.

If the assessee has capital assets like shares, debentures or mutual funds then he can sell that in the financial year and book the capital loss if he occurs any losses after sale. The sale has to be done on or before 31st March. By doing this he can gain from paying the capital gain tax.

7. Account of carry forwarded capital losses.

If an assessee has carry forwarded his losses of previous many years then it should be booked next year as it would get lapsed. If there’s any possibility of capital gain in the next year then the losses should be booked against the capital gains for this year to avail the benefit.

8. Loan accounts to be settled.

Before Every Financial year 31st March
Before Every Financial year 31st March

The assessee should clear up the loan accounts for a good and impressive balance sheet. If there are any small loans given or taken then it should be recovered or closed by paying the amount so that the balance sheet shows good ratios. The ratios will differ there are loans and will not show a good picture.

Thinking things during an interview

The debt equity ratio will improve if the loans are taken or given on or after 1st April. The balance sheet is prepared on 31st March so before that the loan accounts should be cleaned up.

9. Income and expenses account

Before Every Financial year 31st March
Before Every Financial year 31st March

If the business is based on cash payments then the expenses of the business should be paid on or before 31st Mar as it will only be deducted if paid on or before 31st March. If there are any receipts to submitted then it should be done on or before 31st March because the payer must have deducted TDS and will file TDS in respect to the payment done to you.

10. Filing income tax return.

The assessee should file his income tax return on time. Government always reminds the last date of filing the income tax return and that is 31st March. One of the important things is to be up to date in filing income tax returns.

11. GST turnover determining

Things that we seen in class room

If the business is not under the GST registration limit of 20 lakhs then it should be aware of the total turnover figures of his business. On or before 31st March the turnover should be calculated so that one can know if its applicable for the GST registration or if eligible for opting composite scheme or if applicable for filing specific returns.

Before Every Financial year 31st March
Before Every Financial year 31st March

12. Making proper GST Ledgers

The businesses should make proper GST ledgers so that it can be put on GST portal with their books of accounts. GST payments are done either by tax credit or through challan payments. Cash ledger, credit ledger and liability ledger should be properly made. All this needs to be done on or before 31st March.

Before Every Financial year 31st March
Before Every Financial year 31st March

It’s always a stressful time as the date 31st March arrives for all be it business people or service people. If one has these handy tips with him then it would be lot easier for them. There are lot of tax auditors and lots of good accounting software’s available for making it easy for the preparation.

Thanking you
Title Things

Before Every Financial year 31st March
Before Every Financial year 31st March

Stock market trading investments

PostPapa enews

Srikrishna Janmasthal

For the use of review ratings

Book your tickets at best deal

Leave a Reply

Your email address will not be published. Required fields are marked *