As the financial year draws to a close, taxpayers are reminded of several crucial Income Tax and GST compliances that must be completed by March 31, 2026, to avoid penalties and late fees. Chartered Accountant Suresh Surana highlighted these important procedures.

Income Tax Compliances

• Application for Lower / Nil TDS Certificate (Form 13): While not a statutory March-end deadline, applying for Form 13 before the commencement of the new financial year (April 1 onwards) is a prudent step. This enables deductors to apply the appropriate withholding tax rate from the start of the next fiscal year.
• File ITR-U (Updated Income Tax Return): If taxpayers have missed reporting any income, failed to file an Income Tax Return (ITR), or applied an incorrect tax rate in previous years, they should file an ITR-U. This allows for corrections with payment of additional tax, preventing potentially higher penalties if discovered by the Income Tax Department later.

GST Compliances

RSM India provided insights into key GST procedures to be completed by March 31, 2026:

• Reconciliation of Returns and Books: Businesses are advised to undertake a comprehensive reconciliation of their GST returns with their financial records. This ensures accuracy and identifies any discrepancies.
• Input Tax Credit (ITC) Review and Optimization: A detailed review of Input Tax Credit should be conducted to confirm eligibility, ensure proper documentation, and comply with conditions stipulated under the CGST Act. This helps in optimizing ITC claims.
• Common Input Tax Credit Allocation: Businesses must ensure that the allocation of common input tax credit is carried out strictly in accordance with prescribed distribution ratios, often based on turnover or other relevant parameters as per GST provisions. Gaps or incorrect routing of credits can lead to ineligible availment or accumulation of credits in incorrect locations.

Taking timely action on these compliances is essential for effective tax planning and avoiding unforeseen financial and legal implications.