New Financial Year (2024-25) will begin on April 1. For FY 2023-24, there are several tasks that taxpayers should complete before the end of the financial year. While most taxpayers would have already finished all the tax-related tasks by now, those who have not done so must act now. That said, the following is a list top tasks that need to be completed before March 31.

Compliance to Section 43B(h) of Income Tax Act – Applicable to Business Entity

The newly added clause (h) states that any sum payable by the assess to a MSME beyond the time limit set in Section 15 of the MSMED Act, 2006, is eligible for deduction.

This deduction is applicable in the previous year when the sum is actually paid. Clause (h) of Section 45B essentially states that any sum payable by a larger enterprise or entity to a registered MSME beyond the stipulated deadlines won’t be considered a deductible expense in the year the liability was incurred.

Business enterprises are required to pay MSMEs within 45 days, as per section 15 of the MSMED Act, 2006, depending on the presence of a written agreement. In the absence of a written agreement, payment should be made within 15 days. In case there is a written agreement, payment shall be made as per the agreed-upon timeline, not exceeding 45 days.

Choose the Optimal Tax Regime for Your Financial Year 2023-24

• 
  
  
  As the financial year 2023-24 draws to a close, we want to remind you of an important decision you need to make regarding your income tax filing: choosing the appropriate tax regime under the Income Tax Act, 1961.
  
• 
  
  
  With the budget 2023, the government offered a few key changes in the new tax regime to make it more attractive
  
• 
  
  
  The new income tax regime will be set as the default option.
  
• 
  
  
  However, Taxpayer have an option to choose old tax regime
• 
  
  
  The exemptions and deductions in the Old Regime are not available in the New one. The only benefit allowed under the New Tax Regime is the standard deduction of Rs 50,000, also available in the Old Regime.
• 
  
  
  
  In the budget 2023-24 announcement, the rebate under Section 87A has been hiked to Rs. 25,000 for taxable income up to Rs. 7 lakhs under the New tax regime.
  
• 
  
  
  Reduction in the surcharge on annual income above Rs 5 crore from 37% to 25% under the new regime. Currently, the highest tax rate is 42.74%, which would slash the maximum tax rate to 39% after this reduction.

Here is a comparison between the old and new tax slab

However, some of deductions & Exemptions are not available in new regime.

To make an informed decision, we recommend the following steps

1. Review your financial transactions and estimate your taxable income under both regimes.
2. Assess the impact of deductions and exemptions available under the old regime on your tax liability.
3. Compare the tax payable under both regimes to determine which option is more advantageous for you.

Claim Deductions

If you have not done tax savings for FY 2023-24 then you have time till March 31st, 2024 to complete the task. Investments done after the close of FY24 will not be available for claiming deductions under the old tax regime while filing the Income Tax Return or ITR for FY 24.

Utilize all available deductions under Section 80C (like investments in ELSS, PPF, etc.), Section 80D (health insurance premiums), Section 24 (home loan interest), and others to minimize your taxable income.

Payment of Advance Tax

Every taxpayer who has a tax liability exceeding Rs 10,000 has to pay advance tax

Due Date for the payment of advance tax is as Follows .

However, if you have an additional income like capital gains or you have changed your job then you might need to calculate and pay advance tax.

In case you have not yet paid the entire advance tax liability for 2023-2024 by March 15, then you have the chance to pay it by March 31, 2023. Post March, 1 per cent interest per month has to be paid on the due amount till the payment or filing of ITR.

Submit Form 12B

Form 12B is an income tax form that needs to be furnished by the salaried individual if the person joins any new organisation in the middle of the year. If you have changed job during the financial year 2023-2024, you must provide the details of your income using Form 12B. Your new organisation will be able to deduct exact TDS based on the details provided in Form 12B before March 31.

Updated Return (ITR-U)

The Finance Act of 2022 introduced a new provision of “Updated Return,” which gives an opportunity to the assesse to rectify their mistakes or omissions, if they missed out on declaring some income. This updated return can be filed within two years from the end of the relevant assessment year. Therefore, March 31, 2024, is the last date to file the updated return in ITR-U for FY 2020-21 (AY 2021-22).

Review Investments

Assess your investment portfolio and consider rebalancing if necessary to optimize tax efficiency.

Review Capital Gains

If you have made any capital gains during the year, calculate the tax liability on them. Consider offsetting capital gains with losses, if applicable.

If you have sold any Property, then make sure you have calculated LTCG/STCG and proper action to minimize the same has been taken care.

Review Your Income Sources

Ensure that you have accounted for all sources of income including salary, interest, dividends, rental income, capital gains, etc.

Organize Your Documents

Gather all necessary documents such as Form 16 (for salaried individuals), bank statements, investment proofs, property documents, etc

Physical Stock Checking

To get prepared for income tax and GST departmental audit it is important that there should be no difference in physical stock with you and the entry of the same in the books. You should also have a look at ITC reversals while checking the physical stock. If any difference is found in both then do check if any sales are missed while in books.