Now that this Financial Year is about to end, it is time to ensure that you have your finances and its documentation in place. There are a few things that you need to take care of before the end of every financial year.
Read on, to find out what it is that you need to get done in the coming month so that you can make your list of things to do.
**File pending tax returns**
In case you missed the filing of the previous year’s tax returns, it is not lost yet. The last date as per the extended time to file the late returns for FY 2014-15 is 31st March 2017. However, the chance will be lost unless you file the returns before end of this financial year since the 2 year mark will be crossed.
There is a misconception that if there is no tax payable, one need not file the tax returns. In case you did not file your tax returns because there is no amount of tax payable for FY 2014-15, you would be advised to file them right away.
In case if there was no tax to be paid from you for that year, Income Tax will not levy any penalty or interest charges for filing of returns this late. However, in case of tax payable, a small penalty would be payable. However, payment of penalty is affordable as compared to the non-filing of tax returns for a business or an individual.
**Advance Tax to be paid**
For salaried employees, TDS is deducted by the employer and paid to the Income Tax Department on account of the income generated by each employee during the course of the year. Thus as an employee, you need not worry about ‘advance tax’ also known as ‘pay as you earn tax’. However, as an employer, it is your responsibility to deduct and deposit tax within the time limits prescribed by the IT rules as per the Budget 2016. The tax is to be deducted in four instalments – on or before 15th June (15%), on or before 15th September (45%), on or before 15th December (75%), on or before 15th March (100% cumulatively).
Additionally, as a business, you are required to self-assess your tax liability for the year and pay advance tax on your estimated income.
For any late payment, you attract 1% simple interest per month.
**Payment of Professional Tax**
As an employer, you are required to pay Professional Tax on behalf of each of your employees and the Directors of the Company. Additionally, as a registered Company, Professional Tax is payable. Ensure that you have made the PT payments in time.
Deductions are allowed to individual taxpayers for investments made in certain specified instruments like Fixed Deposit, National Savings Certificate (NSC), Public Provident Fund (PPF), Mutual Funds, House Rent Allowance (HRA), etc. And for a business, tax deductions are allowed under Operating expenses, Employee expenses, Interest payments, Tax payments, Insurance, Bad debt, etc.
It is time for you to gather not only your investments and expenses proofs but also your employees’ investments and expenses proofs. Since you have a month in hand, you can make any changes, if required.
For any deduction in invoices raised on account of TDS, you need to ensure that the same has been deposited with the Income Tax Department by the deducting company. Once deposited, it will be automatically be accounted for while calculating your tax for the year.
**Receipts of Donations**
For any donations made by the business to a trust or institution registered under Section 80 G, you get a deduction. If you have made such a donation, do collect the receipt for the same to file it in.
**Computation of Capital gain or loss**
For a sale or transfer of any immovable property, mutual funds, shares, etc during the course of the financial year, capital gain or loss needs to be computed on the transactions.
**Exchange of old notes**
Since demonetisation, old notes of Rs.1000 denomination and Rs.500 denomination are not tradeable in the country. However, if you have any notes left with you, you can get them exchanged at the RBI offices till 31st March. Once the deadline for the exchange of old notes is crossed, they will cease to have value.