Browse Month: March 2017

March End Tasks

What are some of the things one must keep in mind before it is 31st March?

The Business Owners must check the following before closing their books of accounts:

1. Provisional Profit and loss Account – Make this excel based and keep checking income and expenses on an ongoing basis. Take appropriate action such as;

  • a. Investment: The profit estimate helps in evaluating the money, which is available for Investment as this improves net worth.
  • b. Tax Planning
    • Collation of capital gains for tax planning must be done. Take advantage of short-term capital loss if any.
    • Advance Tax should be paid in installments on the profit estimated, as per the due dates provided by the IT department if your total tax liability is Rs.10,000 or more in a financial year. If not paid as per the schedule specified,interest u/s 234B and C has to be paid.
    • Tax deducted at source should be checked. The TDS statement can be accessed from the Income Tax website www.incometaxindiaefiling.gov.in through 26AS. The 26AS statement also helps in reconciling the total income, which we have arrived at with the Income reflecting in the TDS statement. The arrived Income should be equal to/more than the income reflecting in 26AS.
    • Check on contra entries to avoid unnecessary transactions and close off any open transactions in this year itself.
    • Check on loan entries if any and try to close off in the year itself.

2. Should one check on debtors and creditors position?

  • Debtor’s position should be checked at the end of the year. Any receivable you would like to be added to this year’s income?
  • If you have credit period built in for creditors then use the idle cash management strategy.

3. Should one prepay loans at this time? Would that be a good idea?

  • A review of the existing liabilities should be conducted. If there are surplus funds some repayment / prepayment may be considered. For
    instance housing loans can continue however car loans and personal loans can be considered for repayment.
  • Also check the status of the OD account and LAS account.
  • Compare interest rate prevailing and interest rate for a new loans for new clients – can you ask for a reduction?

4. What are some of the investment related actions to be undertaken by March?

  • Tax saving Investments also needs to be made for availing the tax benefits. There are many tax saving instruments available some of which are ELSS, PPF,NPS, NSC, etc.
  • If you have invested in bond funds and are planning to sell anything before March, estimate taxes before doing so. If you are using SWP (Systematic
    withdrawal plans) facility for earning monthly income then make sure you know the capital gain you have to pay.
  • Review your bank statement for any anomalies
  • Equity review – ideally in June but it is a good idea to study this in March too. Settle account with brokers.

E-Verification of Tax Return via Net Banking

After you have successfully filed your income tax return, the next step is to VERIFY it. The Income Tax Department starts processing your return when it is verified. Refunds, if any, are processed for returns, which have been submitted and verified.

We recommend it through Net banking as is the easiest and fastest way to verify your tax return.

Steps to e-verify your tax return via net banking

STEP 1:
Login to your net banking account and locate the income tax e-filing tab. This differs from bank to bank. You will be directed straight to the Department website from here.

STEP 2:
Select the ‘View Returns/Forms’ option to see e-filed tax returns.

STEP 3:
Select the option ‘Click here to view your returns pending for e-verification’

STEP 4:
Select the option ‘e-verify’.

STEP 5:
A new pop-up window appears. Click on ‘Continue’ to generate EVC and get your income
tax return verified.

STEP 6:
A confirmation message will be displayed with a transaction ID and EVC code. Click on the green button to download the attachment. This is for your record only. No further action is required.

Advance Tax And Self Assessment Tax 2017

ADVANCE TAX AND SELF-ASSESSMENT TAX

For Individuals, there are two types of tax that you might have to pay before
submission of your return as on 31st July 2017:

A. Advance Tax

If you have annual tax dues of more than Rs.10,000, you must pay income tax in
advance. Usually, for the salaried, these income tax payments are taken care of via TDS
deductions by employer.

Due Dates of payment of Advance Tax for FY 2016-17

For Individuals
  • On or before 15th June – Up to 15% tax
  • On or before 15th September – Up to 45% of tax
  • On or before 15th December- Up to 75% of tax
  • On or before 15th March- Up to 100% of tax

How to calculate and pay advance tax:

  • Estimate your Total Income: Add income from all sources. Include salary income, interest income,capital gains etc.
  • Allow deductions:From your total income reduce deductions and arrive at your taxable income.
  • Calculate Tax due on total income:Apply the latest income tax slab rates on your taxable income to calculate your income tax due. Reduce any TDS that may have been deducted from your total tax due.

These have to be paid as per the installments mentioned above.


B. Self Assessment Tax

Your income tax return cannot be submitted to the tax department, unless you have paid tax dues in full. Sometimes,you may see tax payable at the time of filing your return (inspite of paying advance tax).
You can only file the returns once you have successfully paid the
income tax online.

Usually, interest under section 234B and 234C will also have to be paid along with your tax due, if you are paying tax after 31st March.

For online payment of both advance tax and self assessment tax

Step 1: Login to http://www.tin-nsdl.com > Services > e-payment: Pay Taxes Online.

Step 2: Select the relevant Challan (CHALLAN NO./ITNS 280)

For individuals paying tax, select 0021 (INCOMETAX OTHER THAN COMPANIES).

Choose the Assessment Year correctly. Choose the type of payment as “100 (ADVANCE TAX)” if you are paying taxes during the financial year. Choose “300 (SELF ASSESSMENT TAX)” if you are paying tax after the financial year has ended. Choose “(400) TAX ON REGULAR ASSESSMENT” if you get a demand notice from the Tax Department.

Figure: Challan for payment of Advance Tax and Self Assessment Tax

Step 3: Select your bank and pay the amount through net banking. Double check the
information entered here and fill in the income tax amount to be paid in the income tax field.

Step 4: A challan counterfoil will be displayed containing CIN, payment details and
bank name through which e-payment has been made. This counterfoil is proof of payment being made. Please store the Counterfoil.