Making March Meaningful – 11 Important Tax Checkpoints Before 31st March

Here are 10 important checkpoints to review before 31st March

Subash

3/13/20265 min read

The last few overs in cricket often decide the match. In taxation too, the final weeks of March can determine the tax liability for the entire financial year.

Smart taxpayers use this period to review their finances, correct mistakes, and legally optimize their tax position. Tax planning becomes especially crucial before the financial year ends.

Every year, the Finance Act introduces new changes. What worked last March may not work this year. With major amendments introduced through the Finance Act, 2025 and the upcoming New Income Tax Act (effective from 01.04.2026), March-end tax planning requires sharper attention.

Here are 10 important checkpoints to review before 31st March.

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1. Advance Tax – March 15 Was Important, But March 31 Still Matters

Ideally, 100% of advance tax should be paid by 15th March. However, if income was underestimated or calculations were missed, taxpayers still have time until 31st March to reduce interest liability under Sections 234B and 234C.

Recalculating tax liability now can help avoid unpleasant surprises at the time of filing the return.

2. New Tax Regime – The ₹12 Lakh Rebate Benefit (With Limitations)

One of the biggest highlights of the Finance Act, 2025 is the enhanced rebate under Section 87A.

Individuals opting for the New Tax Regime (NTR) can have zero tax liability if their normal income does not exceed ₹12 lakh.

However, the rebate (up to ₹60,000) does not apply to income taxed at special rates, such as:

Long-Term Capital Gains (LTCG)
Short-Term Capital Gains under Section 111A

For example:

A salaried individual earning ₹12 lakh may pay zero tax
An investor earning ₹8 lakh as capital gains may still have tax liability

Therefore, while choosing between Old Tax Regime (OTR) and New Tax Regime (NTR), consider both the total income and the nature of income.

3. AIS & Form 26AS – Your Financial Cameras

Form 26AS and the Annual Information Statement (AIS) act like a financial CCTV system.

They track financial transactions such as:

Interest income
Dividends
Securities transactions
Property transactions
Foreign remittances

Although AIS is finalized after 31st May, Form 26AS is updated quarterly.

Before closing your books, download Form 26AS (up to December quarter) and verify:

Unreported interest income
TDS mismatches
Dividend entries

Fixing discrepancies now is much easier than dealing with notices later.

4. Capital Gain Planning – Plan Smartly

The ₹1.25 lakh exemption on LTCG from listed equity still remains available.

If gains exceed this limit, March becomes a good time to review investments.

Important rules:

Long-Term Capital Loss (LTCL) can be set off only against LTCG
Short-Term Capital Loss (STCL) can be set off against both STCG and LTCG

Investors can book losses to neutralize gains. If the stock still fits the investment strategy, it can even be repurchased later.

Tax planning and investment planning can coexist when done intelligently.

5. Review House Rent Allowance (HRA)

If you are claiming House Rent Allowance, ensure that the documentation is complete.

Checklist:

Submit rent receipts
Provide landlord PAN if annual rent exceeds ₹1,00,000
Verify HRA calculations with employer

Proper documentation avoids issues during return filing.

6. MSME Payments – Section 43B(h): The Silent Tax Trap

Section 43B(h) has now entered its third year of practical impact.

If goods or services are purchased from a Micro or Small Enterprise, payment must be made within:

15 days (without agreement), or
45 days (with agreement)

If payment is delayed beyond this period, the expense deduction will be disallowed, even if payment is made before filing the return.

Unlike other Section 43B items, payment before return filing does not rescue the deduction.

Therefore, before finalizing March accounts:

Review the MSME creditor list carefully
Clear pending dues where required

One ignored MSME vendor can significantly increase taxable income.

7. Big Purchases & Depreciation Strategy

Businesses expecting higher profits may consider purchasing:

Machinery
Vehicles
Equipment
Office infrastructure

before 31st March to claim depreciation.

Even if the asset is used for only a few days, 50% depreciation is allowed (subject to conditions).

Once an asset is capitalized and put to use, depreciation becomes mandatory.

The timing of capitalization can influence both taxable profit and financial ratios.

8. Review Loan & Capital Accounts

Unnecessary debit or credit balances in books can lead to future tax litigation.

Before closing the financial year:

Review loan balances
Adjust capital accounts
Clear non-genuine or old balances

March is not just about tax saving—it is also about litigation prevention.

9. TDS & Compliance Review – New Rules from 01.04.2025

Several TDS provisions have been rationalized from 1st April 2025.

Key changes include:

Increased threshold limits for many TDS sections
TCS on sale of goods under Section 206C(1H) abolished
Higher TDS for non-filers removed

For the financial year ending 31st March, ensure that all TDS deductions, payments and filings are properly completed.

Small compliance gaps can become costly during assessment.

10. Firms & Partners – Upcoming TDS under Section 194T

From FY 2025–26, a new provision will apply.

Under Section 194T, firms must deduct 10% TDS on:

Salary to partners
Remuneration to partners
Interest paid to partners

if the amount exceeds ₹20,000 annually.

Partnership firms should prepare accounting systems and partnership agreements accordingly.

Planning in March helps avoid confusion in April.

11. Inventory Verification & Financial Ratio Review

Physical stock verification is not just an accounting ritual—it is a tax necessity.

Differences between book stock and actual stock can result in tax additions.

At the same time, review key financial ratios, since March balance sheets are often examined by:

Banks
Rating agencies
Tax authorities

Strategic timing of income, expenses, assets and liabilities—within legal boundaries—can optimize both tax outcomes and financial reporting.

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Final Thoughts

Every year taxpayers promise to start early, yet March often ends with a last-minute rush.

But this year is different.

With:

Enhanced rebate up to ₹12 lakh
Special rate income exclusions
MSME disallowance under Section 43B(h)
Rationalized TDS provisions
Expanding tax data analytics

tax planning is no longer just about last-minute Section 80C investments.

Today, effective tax planning requires:

Understanding the nature of income
Managing timing of payments
Maintaining compliance discipline
Adopting strategic financial structuring

Before the financial year closes:

Review your ledger
Download Form 26AS
Check MSME creditors
Review capital gains
Calculate advance tax
Clean up your books

Make this March meaningful—not stressful. Because the taxman may wait, but 31st March never does.

GST Related News:

1. Strict E-Invoicing Compliance Continues

E-invoicing remains mandatory for businesses with aggregate turnover exceeding ₹5 crore in any financial year since FY 2017-18.

Additionally, businesses with turnover above ₹10 crore must upload invoices to the Invoice Registration Portal (IRP) within 30 days of the invoice date.

Failure to comply may result in invoice rejection and denial of Input Tax Credit (ITC) to the buyer.

2. Minimum GST Refund Limit Removed

The earlier minimum refund limit of ₹1,000 has been removed, allowing taxpayers to claim even small refund amounts.

This step is expected to improve liquidity for exporters and businesses facing inverted duty structures

3. Post-Sale Discount Clarification (Major GST Amendment)

The government clarified GST treatment for post-sale discounts.

Earlier:

GST deduction allowed only if discount agreement existed before supply.

New Rule:

Businesses can reduce GST liability through credit notes even without a prior agreement, provided the recipient reverses the related ITC.

Impact

Reduces litigation in discount transactions
Helps industries with year-end rebates, trade discounts, and incentives
Provides flexibility in pricing strategies

4. Provisional Refund Allowed for Inverted Duty Structure

In the 56th GST Council Meeting (3 September 2025), the government recommended providing provisional refund of 90% of the claimed amount for cases involving Inverted Duty Structure. This measure is intended to reduce working capital blockage for businesses where input GST rates are higher than output GST rates.

Pending amendments to the CGST and SGST Acts, the Central Board of Indirect Taxes and Customs (CBIC) has instructed tax authorities to grant provisional refunds up to 90% of the claimed amount from 1 October 2025, based on system-based risk evaluation.

This step aims to improve liquidity for manufacturers and businesses affected by inverted duty structures and support smoother GST refund processing.

Benefits:

Faster cash flow for exporters
Reduces working capital blockage
Improves liquidity for manufacturing sectors.