As the financial year comes to an end, businesses must ensure that all Income Tax related activities are properly completed before 31 March to avoid penalties, notices, and unnecessary tax liability. Proper year-end planning helps in tax saving, compliance, and smooth audit preparation.
At Komplytek, we help businesses complete their financial year closing with accurate accounting, tax planning, and compliance management.
Below is a complete Income Tax Closing Checklist for FY 2025–26.
📊 Review Profit & Loss Account
• Verify all income is recorded
• Check expense booking
• Identify disallowed expenses
• Check extraordinary / one-time entries
✔ Helps in correct tax calculation
✔ Avoids mismatch during audit
🧾 Verify All Expenses Are Booked Before 31 March
Ensure booking of:
• Rent
• Salary & bonus
• Professional fees
• Interest
• Electricity / internet / office expenses
• Consultancy charges
👉 Expenses not booked before year end may not be allowed for deduction.
🏦 Check TDS Deduction & Deposit
• Verify TDS deducted on all applicable payments
• Deposit TDS before due date
• Match with TRACES / Form 26Q / 24Q
• Check vendor TDS mismatch
Important for:
• Salary
• Contractor payments
• Professional fees
• Rent
• Commission
Late deduction may lead to:
• Disallowance of expense
• Interest & penalty
💰 Verify Advance Tax Payment
Check whether advance tax is properly paid:
• June installment
• September installment
• December installment
• March installment
👉 If short paid → Pay before 31 March to avoid interest u/s 234B & 234C.
🏢 Depreciation Calculation on Fixed Assets
• Update asset register
• Add new assets purchased
• Remove sold assets
• Calculate depreciation as per Income Tax Act
✔ Reducing taxable income
✔ Correct balance sheet reporting
🔗 Check Related Party Transactions
Verify transactions with:
• Directors
• Partners
• Group companies
• Relatives
• Sister concerns
Ensure:
• Proper documentation
• Reasonable pricing
• Compliance with Income Tax rules
Required for audit & transfer pricing cases.
📉 Verify Loans, Advances & Interest
Check:
• Loan balances
• Interest provision
• Interest TDS
• Confirmation from parties
Mismatch may lead to notice during assessment.
🔍 Reconcile Books with Bank & GST
• Bank reconciliation
• GST reconciliation
• TDS reconciliation
• Debtors / creditors confirmation
Important for:
• Income tax return
• Audit
• GST return
• Financial statements
⚖ Check Disallowances Under Income Tax Act
Review expenses not allowed fully, such as:
• Cash payments above limit
• Late TDS deposit
• Personal expenses
• Penalty / fines
• Unapproved provisions
Proper review helps in correct tax calculation.
📑 Prepare for Tax Audit (If Applicable)
Check applicability of audit u/s 44AB.
Keep ready:
• Books of accounts
• Invoices
• Bank statements
• TDS details
• GST returns
• Agreements / contracts
Proper preparation avoids last-minute issues.
💡 Plan Tax Saving Before 31 March
Possible planning:
• Bonus / incentive booking
• Asset purchase
• Expense provisioning
• Investment planning
• Salary restructuring
Tax planning must be done before year end.
✅ Final Review Before Closing Books
Before closing accounts ensure:
✔ All entries passed
✔ All taxes calculated
✔ All reconciliations done
✔ All compliances checked
This ensures smooth filing of:
• Income Tax Return
• Tax Audit Report
• GST Return
• Financial Statements
🏁 Conclusion
Financial year closing is not just accounting work — it is the most important time for tax planning, compliance, and financial control.
With proper guidance from Komplytek businesses can complete Income Tax closing smoothly and avoid penalties, notices, and extra tax burden.
If your business needs support in:
✔ Income Tax Closing
✔ Tax Planning
✔ Audit Preparation
✔ Accounting Finalisation
✔ Virtual CFO Services
Komplytek team is ready to help.