Year-End Tax Checklist for Indian Businesses

A good year-end tax checklist turns the busiest weeks of the financial year into a planned sequence instead of a scramble. In India, 31 March is the deadline for several tax decisions that cannot be made later: opting into schemes, paying advance tax, paying micro and small suppliers in time, and filing the next year's LUT. Other tasks, such as GST reconciliations and books closure, are easier if started in February. This checklist covers GST, income tax and accounting for SMBs, organised by timing, with notes on the most common misses.

February: start early

GST

• Reconcile April to January: sales register versus GSTR-1, GSTR-1 versus GSTR-3B, purchase register versus GSTR-2B.
• List suppliers whose invoices are missing in GSTR-2B and follow up now, while there is time before year end.
• Review ITC reversals for suppliers unpaid beyond 180 days and plan payments to reclaim the credit.
• Check that HSN codes and rates in the item master match current notifications.

Income tax and payables

• Run a provisional profit and loss for April to January and estimate full-year profit for the final advance tax instalment.
• List dues to micro and small enterprises that will fall due around 31 March. Late payment means the expense is deductible only when paid. See our MSME 45-day payment rule guide.
• Review TDS deducted and deposited for April to January; fix short deductions before year end.

March: decisions that must be made before 31 March

Task	Deadline	Why it matters
Final advance tax instalment	15 March (presumptive taxpayers: full amount by 15 March)	Interest on shortfall and deferment
Pay micro and small enterprise dues within MSMED time limits	As per each due date, especially around 31 March	Expense disallowed for the year if paid late
Opt in to composition for next year (CMP-02)	By 31 March	Cannot opt in mid-year
File LUT for next year (RFD-11)	Before first export of the new year; ideally by 31 March	Exports without IGST need a valid LUT
Review e-invoicing applicability	Before 1 April	If turnover crossed ₹5 crore in any year, e-invoicing applies
Plan new invoice series	Before 1 April	Numbers must be unique per financial year
Capital expenditure timing	Before 31 March	Assets put to use after a cut-off may get reduced depreciation for the year

Also in March

• Confirm QRMP or monthly filing preference for the April to June quarter within the opt-in window. See QRMP versus monthly filing.
• Collect Udyam details from suppliers missing them, so the tax audit disclosure is accurate.
• Obtain lower deduction certificates from vendors who need them for the new year.
• Plan the physical stock count for 31 March or the nearest working day.

31 March and the first days of April: closing the books

1. Physical stock count and reconciliation with book stock. Write off damaged or expired goods and reverse ITC on goods written off, lost or destroyed.
2. Cut-off: ensure goods dispatched by 31 March are invoiced in March and goods received are recorded as purchases.
3. Accruals and provisions: book expenses incurred but not billed; deduct TDS where amounts are credited to vendor accounts.
4. Bank reconciliation for all accounts as on 31 March.
5. Debtors and creditors confirmations for key parties.
6. Fixed asset register: additions, disposals, depreciation as per books and tax.
7. Unbilled revenue and advances at year end, which create GST and books differences to reconcile in the annual return.
8. Foreign currency balances restated at year-end rates.
9. Lock the period in the accounting software after closing, so changes are controlled and logged.

April: deposits and first returns

• Deposit TDS for March by 30 April.
• File March GSTR-1 and GSTR-3B (or the January to March quarter returns).
• Composition taxpayers file GSTR-4 by 30 April.
• File ITC-04 for job work by 25 April where applicable.
• File MSME Form 1 for the October to March half-year, if your company has MSE dues outstanding beyond 45 days.
• Start the new invoice series and confirm e-invoicing is live if applicable.

After year end: deadlines that still relate to last year

Deadline	Task
31 May	TDS return for the January to March quarter
By the September return	Report remaining prior-year invoices, amendments and the annual common credit reversal adjustment
30 September onward	Tax audit report, where applicable (dates are often notified)
30 November	Last date to claim prior-year ITC and declare prior-year credit notes
31 December	GSTR-9 and GSTR-9C

Worked example: the cost of missing two items

A company with an effective tax rate of 25.168% misses two things. First, it pays a micro supplier's ₹4,00,000 bill on 25 April when the 45-day limit ended on 10 April. The expense moves to the next year, increasing this year's tax by ₹1,00,672 (25.168% of ₹4,00,000). Second, it forgets ₹60,000 of ITC on a prior-year invoice until December, after the 30 November deadline, and loses that credit permanently. The first is a timing cost; the second is a permanent loss. Both were avoidable with a February review.

The year-end GST reconciliation pack

Prepare a pack your CA or auditor can use directly:

1. Month-wise sales: books versus GSTR-1 versus GSTR-3B.
2. Month-wise ITC: books versus GSTR-2B versus GSTR-3B, with reversals by rule.
3. RCM liability and credit summary.
4. List of credit and debit notes, with GST and financial notes separated.
5. Export summary with LUT, shipping bills and realisation status.
6. E-way bill summary compared with sales.
7. Pending items carried into the next year with expected periods.

The income-tax year-end pack

Alongside the GST pack, prepare an income-tax working file that your CA can use for the tax computation, tax audit and return:

1. TDS summary: deductions by category and vendor, challans deposited, quarterly returns filed, and any short deductions corrected.
2. TDS receivable: TDS deducted by your customers, reconciled with Form 26AS or the annual information statement, with a list of customers whose deductions are missing.
3. Advance tax: challans for each instalment and the estimate used.
4. MSE payables: list of micro and small enterprise suppliers, amounts outstanding at year end, due dates and payment dates, to identify any disallowance.
5. Fixed assets: additions with put-to-use dates, disposals and tax depreciation.
6. Disallowances: expenses where TDS was not deducted, personal expenses, penalties and other inadmissible items.
7. Related party transactions: payments to directors, partners and their relatives.
8. Loans and deposits: cash transactions above prescribed limits, which have specific reporting and penalty rules.

Because the Income-tax Act, 2025 took effect from 1 April 2026, returns filed for FY 2025-26 still relate to the old Act's provisions, while transactions from FY 2026-27 onwards follow the new Act. Your CA will map the old section references to the new ones; ask for a short note on which numbering applies to each form you file in the transition year.

Who does what: a simple responsibility grid

Task	Accounts team	Owner or finance head	CA
GST reconciliations and supplier follow-up	Prepares	Reviews exceptions	Reviews annual pack
Advance tax estimate	Provides provisional figures	Approves projection	Computes tax
MSE payment run	Lists dues	Approves payments	Advises on disallowance
Stock count and write-offs	Conducts count	Approves write-offs	Advises on ITC reversal
LUT, composition and QRMP choices	Files forms	Decides	Advises
Books closure and audit file	Prepares	Signs off	Audits

Common year-end misses

• Not filing the LUT before the first export in April.
• Restarting invoice numbers mid-year or continuing last year's series into the new year when the format requires a year prefix.
• Forgetting ITC reversal on goods written off at the stock count.
• Missing TDS on year-end provisions credited to vendors.
• Paying MSE vendors after the time limit because the payment run was delayed.
• Leaving the advance tax estimate to the last day.

How Fininvo helps

Fininvo ERP brings GST invoicing, purchase reconciliation with GSTR-2A/2B, TDS deduction and financial reports into one system, so year-end reconciliations start from linked data. Explore tax compliance, reports and pricing.

General information, not tax advice. Dates and thresholds are set by notification and changed with the Income-tax Act, 2025; consult your CA.

Frequently Asked Questions

When should I start year-end tax work?

In February. Reconciliations, supplier follow-ups and MSE payment planning need time, and several decisions must be made before 31 March.

Do I need a new invoice series from 1 April?

Invoice numbers must be unique for each financial year. Most businesses start a new series with a year prefix from 1 April.

Is LUT renewal automatic?

No. A fresh LUT must be filed for each financial year on the GST portal.

Can I still claim last year's ITC after 31 March?

Yes, until 30 November of the next year or the date of filing the annual return, whichever is earlier, if the invoice appears in GSTR-2B and other conditions are met.

Why does the stock count matter for GST?

Goods lost, destroyed or written off require reversal of the ITC claimed on them. The stock count is when these are identified.