Things to do at Financial Year End At the financial year-end, we have a lot of work to do completely by 31st March 2021. Some of such task includes...
Things to do at Financial Year End
At the financial year-end, we have a lot of work to do completely by 31st March
2021. Some of such task includes details submitting to the employer,
calculating deduction under chapter VI, and making a minimum contribution to PPF,
NPS and Sukanya Samriddhi Yojana. File your pending ITR for the year ending on
31st March 2020 and last but not least in the business closing books of accounts making cash management, Advance Tax Payment, Splitting Accounts data or making a new invoice series for the new financial year. We will discuss these points in detail-
1. Submitting the Details to the employer: If you are a salaried person and employed with more than one employer then you have to submit your deduction under chapter VI details with the employer and salary amount details with each of the employers so the TDS amount can be calculated.
2. The minimum contribution to Government schemes: In the case of PPF, and NPS you have to deposit a minimum of Rs 500 in a financial year. and the minimum annual contribution to the Sukanya Samriddhi Account is Rs.250 and the maximum of Rs.1.50 lakh in a financial year. You have to invest at least the minimum amount every year for up to 15 years from the date of account opening. Thereafter the account will continue to earn interest till maturity. Employer PF and Professional tax should be deposited on or before 31st March.
3. File your pending ITR: 31st March 2021 is the last date for filing a belated ITR for AY 2020-21 and for the financial year ending on 31st March 2020. You can file ITR till 31.3.2021 with a penalty of Rs 1000 if the gross total income exceeds Rs 2.5 Lacs or with a late fee of Rs 10000/- if the Gross total income exceeds Rs 5 Lacs.
4. Advance Tax Payment: If your total tax liability (after adjusting for TDS) exceeds ₹ 10,000 (Rupees Ten Thousand) in a financial year, then you must pay advance tax. The advance tax applies to all taxpayers including salaried, freelancers, professionals, and senior citizens. However, senior citizens who are above 60 years of age and do not run a business are exempted from paying advance tax. While calculating the advance tax, you need to include income from all sources for the current year under various income heads.
Works to do in Books:
By the financial year-end, we have to do some work to prepare for the new financial year. we will discuss some points in detail below:
1. Cash management: Check the financial year data for negative cash balance, as in any day cash balance should not be in negative during the financial year and no payment should be more than Rs 10000/- during the financial year.
2. GST Set-off entries: If you are a taxable assessee under GST then if you have not passed the set-off entries monthly GST entry of GST input and output these entries should be passed to gain an actual position of ITC available.
3. GSTR 2A Match with GST ITC in books: Input tax credit entries should be checked with the ITC is available in GSTR 2A so it can find out which supplier has not filed the GST return or any supplier has filed the return but we have omitted the entries in the books so pass those entries in the books. And also check for ITC which has been taken in the books but not allowed as per GST law.
4. TDS Deduction related to Payment: Check for payment made for expenses which are liable to deduct tax but not deducted if tax is not deducted on those expenses then these expenses will not be available for deduction under the Profit and loss account.
5. TDS on Interest paid to NBFC: As per the Income-tax Act interest is paid to banks only but if you are paying interest to NBFC then you have to deduct TDS on interest. If TDS is not deducted then the interest paid to NBFC will be disallowed u/s 40(a)(ia). TDS deducted on interest paid to NBFC can be reimbursed from NBFC as per normal practice.
6. Starting Invoicing in New Financial Year: As per the GST act invoice no. should be different from one financial year to another and its maximum length is 16. So for stating invoicing in the new financial year we should generate a new invoice series like your business name/21-21/invoice no. for example Saraltaxindia's invoice ST/21-22/001
7. HSN/SAC requirement under GST: as per a recent amendment made under the GST act every person whose turnover is up to Rs 5 Crore 4 digits HSN Code is mandatory and for persons having turnover of more than 5 Crore has to maintain six (6 digits) digit HSN/SAC number in Invoice and in GSTR 1 HSN details.
Notification No. 12/2017- Central Tax dated June 28, 2017, was amended vide Notification No. 78/2020 – Central Tax, dated October 15, 2020, to mandate compulsorily mentioning of 4/6- digit HSN/SAC Code on supply of goods or services on the tax invoices w.e.f. April 1, 2021
8. E-invoicing requirements: GST e-invoicing is mandatory for turnover of Rs 50 cr and above from April 1. E-invoicing under the goods and services tax (GST) regime will become mandatory for entities with a turnover of Rs 50 crore and more from April 1 for business-to-business (B2B) transactions.
9. Renewal of LUT ( Letter of Undertaking): Every registered exporter who desires to export the goods or services without the IGST shall apply for renewal of LUT at the end of the financial year, for the next FY 2021-22 in order to continue making the exports without the payment of IGST.
An exporter is required to furnish a bond or LUT to the jurisdictional Commissioner before effecting zero-rated supplies.
10. Moving Data to New financial year: We have many options to move data from one financial year to another. likewise in Tally, we can simply start the new financial year by changing the period by pressing Alt+F2. Or we can split the data from the financial year-end. or creating a new company and importing the master into the new company.
11. Link PAN number with Aadhar: 31st march 2021 is the last date for linking PAN with Aadhar if the PAN is not linked with Aadhar then PAN will be inoperative and can be operated with a fee up to Rs 1000 (One Thousand Rupees).
As per the Section 234H of the Finance Bill (Lok Sabha), "Without prejudice to the provisions of this Act, where a person is required to intimate his Aadhaar number under sub-section (2) of section 139AA and such person fails to do so on or before such date, as may be prescribed, he shall be liable to pay such fee, as may be prescribed, not exceeding one thousand rupees (Rs 1,000), at the time of making intimation under sub-section (2) of section 139AA after the said date.” Link Aadhar with PAN
1. Submitting the Details to the employer: If you are a salaried person and employed with more than one employer then you have to submit your deduction under chapter VI details with the employer and salary amount details with each of the employers so the TDS amount can be calculated.
2. The minimum contribution to Government schemes: In the case of PPF, and NPS you have to deposit a minimum of Rs 500 in a financial year. and the minimum annual contribution to the Sukanya Samriddhi Account is Rs.250 and the maximum of Rs.1.50 lakh in a financial year. You have to invest at least the minimum amount every year for up to 15 years from the date of account opening. Thereafter the account will continue to earn interest till maturity. Employer PF and Professional tax should be deposited on or before 31st March.
3. File your pending ITR: 31st March 2021 is the last date for filing a belated ITR for AY 2020-21 and for the financial year ending on 31st March 2020. You can file ITR till 31.3.2021 with a penalty of Rs 1000 if the gross total income exceeds Rs 2.5 Lacs or with a late fee of Rs 10000/- if the Gross total income exceeds Rs 5 Lacs.
4. Advance Tax Payment: If your total tax liability (after adjusting for TDS) exceeds ₹ 10,000 (Rupees Ten Thousand) in a financial year, then you must pay advance tax. The advance tax applies to all taxpayers including salaried, freelancers, professionals, and senior citizens. However, senior citizens who are above 60 years of age and do not run a business are exempted from paying advance tax. While calculating the advance tax, you need to include income from all sources for the current year under various income heads.
Works to do in Books:
By the financial year-end, we have to do some work to prepare for the new financial year. we will discuss some points in detail below:
1. Cash management: Check the financial year data for negative cash balance, as in any day cash balance should not be in negative during the financial year and no payment should be more than Rs 10000/- during the financial year.
2. GST Set-off entries: If you are a taxable assessee under GST then if you have not passed the set-off entries monthly GST entry of GST input and output these entries should be passed to gain an actual position of ITC available.
3. GSTR 2A Match with GST ITC in books: Input tax credit entries should be checked with the ITC is available in GSTR 2A so it can find out which supplier has not filed the GST return or any supplier has filed the return but we have omitted the entries in the books so pass those entries in the books. And also check for ITC which has been taken in the books but not allowed as per GST law.
4. TDS Deduction related to Payment: Check for payment made for expenses which are liable to deduct tax but not deducted if tax is not deducted on those expenses then these expenses will not be available for deduction under the Profit and loss account.
5. TDS on Interest paid to NBFC: As per the Income-tax Act interest is paid to banks only but if you are paying interest to NBFC then you have to deduct TDS on interest. If TDS is not deducted then the interest paid to NBFC will be disallowed u/s 40(a)(ia). TDS deducted on interest paid to NBFC can be reimbursed from NBFC as per normal practice.
6. Starting Invoicing in New Financial Year: As per the GST act invoice no. should be different from one financial year to another and its maximum length is 16. So for stating invoicing in the new financial year we should generate a new invoice series like your business name/21-21/invoice no. for example Saraltaxindia's invoice ST/21-22/001
7. HSN/SAC requirement under GST: as per a recent amendment made under the GST act every person whose turnover is up to Rs 5 Crore 4 digits HSN Code is mandatory and for persons having turnover of more than 5 Crore has to maintain six (6 digits) digit HSN/SAC number in Invoice and in GSTR 1 HSN details.
Notification No. 12/2017- Central Tax dated June 28, 2017, was amended vide Notification No. 78/2020 – Central Tax, dated October 15, 2020, to mandate compulsorily mentioning of 4/6- digit HSN/SAC Code on supply of goods or services on the tax invoices w.e.f. April 1, 2021
8. E-invoicing requirements: GST e-invoicing is mandatory for turnover of Rs 50 cr and above from April 1. E-invoicing under the goods and services tax (GST) regime will become mandatory for entities with a turnover of Rs 50 crore and more from April 1 for business-to-business (B2B) transactions.
9. Renewal of LUT ( Letter of Undertaking): Every registered exporter who desires to export the goods or services without the IGST shall apply for renewal of LUT at the end of the financial year, for the next FY 2021-22 in order to continue making the exports without the payment of IGST.
An exporter is required to furnish a bond or LUT to the jurisdictional Commissioner before effecting zero-rated supplies.
10. Moving Data to New financial year: We have many options to move data from one financial year to another. likewise in Tally, we can simply start the new financial year by changing the period by pressing Alt+F2. Or we can split the data from the financial year-end. or creating a new company and importing the master into the new company.
11. Link PAN number with Aadhar: 31st march 2021 is the last date for linking PAN with Aadhar if the PAN is not linked with Aadhar then PAN will be inoperative and can be operated with a fee up to Rs 1000 (One Thousand Rupees).
As per the Section 234H of the Finance Bill (Lok Sabha), "Without prejudice to the provisions of this Act, where a person is required to intimate his Aadhaar number under sub-section (2) of section 139AA and such person fails to do so on or before such date, as may be prescribed, he shall be liable to pay such fee, as may be prescribed, not exceeding one thousand rupees (Rs 1,000), at the time of making intimation under sub-section (2) of section 139AA after the said date.” Link Aadhar with PAN
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