In India, Financial Year is from 1st of April to 31st March every year. Hence, 31st March is an important date by which important financial obligations should be fulfilled. So we bring 10 things that every business should ask its chartered accountant to must complete before 31 st March 2017:
1) Calculate Payable Advance Tax
Income tax follows the principle of “Pay As You Earn”. Therefore during the financial year from 1st April 2016 to 31st March 2017 Advance Income tax was payable on or before 15th June 2016, 15th Sept 2016, 15th Dec 2016 and 15th March 2017. If an assessee has not paid at least 90% of his tax payable by way of advance tax on or before 31st March 2017, interest will start from 1st April 2017 till the month of the payment.
2) Calculate Service Tax Dues
As per the Service Tax Rules, it is necessary to pay service tax dues for the last quarter of the financial year i.e. 1st January 2017 to 31st March 2017 on or before 31st March 2017. Interest will be levied if the payment if not made on or before 31st March 2017.
3) Make Investments To Save Tax
Make investments eligible for deductions under Chapter VI A. Subject to certain conditions, different types of assesses are entitled for deduction of specified amount from Gross total Income before arriving at the Taxable Income.
4) Manage Physical Inventory
Take a physical inventory of Raw Materials, Work In Progress, Finished Good, Stores & Spares, Loose Tools, Consumables etc as on 31st March 2017. Also compile information of its market value as on 31st March 2017 which would be essential at the time of valuation to be adopted in the Balance Sheet as on 31st March 2017.
5) Purchase Of Fixed Assets For Business
Purchase asset to claim depreciation (half of specified rate of depreciation). If any tangible or intangible fixed asset has been purchased for the purpose of business during the previous year and is put to use for the purpose of business or profession for the period of 180 days or more, depreciation will be allowed at the percentage prescribed for that kind of asset. If you are planning to sell any fixed asset, try to differ the sale, if possible to 1st April 2017 so as to avail deduction of depreciation for the financial year 2016-17.
6) Claim Additional Depreciation And Incentive
For manufacturing unit, you can purchase asset to claim additional depreciation. In respect of new plant and machinery purchased and install after 31st march 2005 by an assessee engaged in the business of manufacture or production, additional depreciation of 20% of the actual cost of the plant and machinery will be allowed as depreciation subject to certain terms and conditions. If such plant and machinery is purchased and put to use for less than 180 days, additional depreciation would be allowed at the rate of 10% subject to certain other terms and conditions. Hence, a manufacturing unit can avail this additional deduction of depreciation by purchasing plant and machinery and putting it to use on or before 31st March 2017.
7) Find Out Capital Gains
If an assessee has taxable capital gains during the financial year 2016-17, he can try to identify his capital assets, especially shares, Mutual funds, debentures etc, which if sold during the financial year, will result into a capital loss, he can sale such assets on or before 31st March 2017 and book a capital loss which will help to set off against the taxable capital gain and as a result will reduce or nullify the capital gains tax.
8) Account For Unabsorbed Capital Losses
If an assesse has a carried forward Capital loss relevant to the AY 2008-09 i.e. prior to 8 assessment years, which could not be fully set off against Capital Gain for the AY 2009-10 to 2016-17, it will laps if it could not be set off against the Taxable Capital Gain for AY 2017-18. Hence, if the assesse has a possibility of having taxable Capital Gain for Financial Year 2016-17, he should not postpone it to the next year, but book the gain on or before 31st March 2017 so as to set off the Capital loss of AY 2008-09 against the Capital Gain for AY 2017-18.
9) Cleanup Your Loan Accounts
Verify loan accounts and cleanup them up if necessary. If an assessee has given or taken any temporary loans, hand loans and are outstanding, try to repay / recover the same on or before 31st March 2017. This will help in improving the balance sheet position of the ratio of assets and liabilities, Debt Equity Ratio etc. Temporary loans, hand loans can be again given or taken on or after 1st April 2017.
10) Manage Professional Income &
Expenses In respect of professions following cash system of accounting, business expenses are allowed to be deducted only if they are actually paid on or before 31st March 2017. Hence, it is advisable to make payments of all business expenses related to the period up to 31st March 2017 on or before that date. Its always great to keep this checklist handy during the financial year end activities. A good accounting software can help you prepare better for the coming financial year so that you can avoid last minute stress.