What does March 31st mean to you? March 31st holds various meanings for different people around the world. Interestingly, March is something different for each person. For some, it’s a regular day, just like any other on the calendar, where they carry on with their daily routines or work. However, for those who celebrate Christian holidays, March 31st holds significance, as it falls during the Holy Week.
Likewise, in certain cultures, it marks a traditional holiday or celebration, such as in Vietnam, where it commemorates the death anniversary of national hero Tran Hung Dao, who triumphed over Mongol invaders in the 13th century. Interestingly, for students and educators, March 31st might hold a special place, as it falls towards the end of the school year. It’s a time to wrap up the academic year with final exams, projects, and assignments before embarking on a well-deserved summer break.
Let’s look at what March 31st meant for the business world. March 31st is a significant date for finance professionals, businesses, and governments worldwide. As the end of the financial year approaches, it serves as a reminder to proactively assess and complete financial tasks before the deadline to avoid penalties. It’s a day to tie up loose ends, balance books, and ensure all accounts are in order. It’s a day that brings a sense of urgency, and financial professionals must work meticulously to meet the deadline.
March 31st marks the end of one financial year and the beginning of a new one, providing an opportunity to set new financial goals and strategies for the year ahead. It’s a day that reminds us to be responsible with our finances, stay organised, and plan for a financially secure future.
It is now the time for the financial year, FY 2023 is coming to an end soon and the beginning of FY 2024.
RBI
“The accounting year for the Reserve Bank of India was changed to April-March (earlier July-June) from the financial year 2020-21 onwards. Where available, this chapter has been updated beyond March 2022.”
Financial Deadlines in March 2023
There are some important tasks that must be completed by March 31st, 2023,
Let’s have a look.
PAN-Aadhaar Linking
The Income Tax (IT) department brought a new law that it is mandatory to link Aadhaar with Permanent Account Number (PAN) by this financial year, March 31st, 2023. If the PAN is not linked within the date, it will become inoperative from April 1st, 2023, in the coming financial year. With a 1000 rupees fine, the taxpayers can link the deadline.
You can use the National Securities Depository Limited (NSDL) portal to make a payment for challan number ITNS 280, which falls under the major head 0021 for Income Tax other than companies and the minor head 500 for Other Receipts. It is important to note that while income tax returns can be filed without linking the PAN card and Aadhaar, the department doesn’t process the returns.
Update income-Tax Return Filing
March 31st, 2023, is the deadline for updated Income Tax returns (ITR) for FY 2019-2020. This is mainly for those who have missed ITR filing at the time of a given financial year or missed reporting any income. The new provision that is regarding the Updated return introduced in Finance Act 2022 allows you to mark your income which you may have missed out on within the deadline.
Advance Tax Payment
As per the IT department rules and regulations, the last date for paying the financial instalment of advance tax payment is March 15th, 2023. If one can’t pay the advance tax due to the banks being closed, taxpayers must pay the next working day immediately. The default in Tax payment will be subjected to penalties in accordance with sections 234B and 243C of the Income-tax Act 1961.
Tax-Saving Investments
March 31st, 2023, is the deadline for the tax-saving investments for FY 2022-23. Tax planning will contribute much more to reducing tax liability and saving more. The less tax you pay, the more disposable income you will have. You have to leverage the available Tax saving option to save a significant amount of tax.
Pradhan Mantri Vaya Vandana Yojana (PMVY)
PMVY is the best insurance policy-cum pension scheme, which is introduced to provide security for senior citizens. The pension plan provided by Life Insurance Corporation (LIC) caters to the insurer’s need for post-retirement financial planning. The subscriber can gain the pension monthly, quarterly, semi-annually, or annually. The PMVY scheme guarantees 7.4 per cent for ten years as interest.
Overview of the financial year in India
In India, the financial year runs from April 1st to March 31st of the following year. The year can be addressed as a fiscal year or accounting year. During this period, the government of India prepares its annual budget, and businesses and individuals file their income tax returns for the previous financial year. The financial year is used to calculate income tax, and companies also use it to prepare their financial statements and annual reports.
The financial year is important because it calculates income tax, prepares financial statements and annual reports, and creates budgets. Let’s take a closer look at each of these areas.
Income Tax: The financial year is used to calculate income tax for individuals and businesses. For example, the income earned from April 1st, 2022, to March 31st, 2023, will be considered for calculating income tax for the financial year 2022-23. Individuals and businesses must file their income tax returns for the previous financial year by the due date, usually July 31st for individuals and September 30th for businesses.
Barry Goldwater: “The income tax created more criminals than any other single act of government.”
If it doesn’t file properly, it will be a punishable offence. The tax department levies heavy fines on an individual who does not file and pay their tax; as per section 234F, a fine of 10000 will be levied for tax return failure. ITR three years is a must factor while applying for any bank loan, even for the loan regarding medical treatment as well.
Financial Statements: Companies use the financial year to prepare their financial statements and annual reports. Financial statements include a balance sheet, income statement, and cash flow statement, which provide information about a company’s financial performance, assets, liabilities, and cash flow over the 12-month period. The annual report is then presented to the company’s shareholders, investors, and other stakeholders.
Budgets: The government of India prepares its annual budget during the financial year. The budget outlines the government’s revenue and expenditure for the upcoming year, including allocations for various sectors such as health, education, and defence. The budget is presented by the Finance Minister in Parliament and provides a roadmap for the government’s economic policies and priorities.
“The king must make arrangements for Yogakshema (welfare) of the populace by way of abandoning any laxity and by governing the state in line with Dharma, along with collecting taxes which are in consonance with the Dharma.”
(Mahabharat, Shanti ParvaAdhyaya. 72. Shlok 11)
– Nirmala Sitharaman, Union Budget, 2022
Here are some of the key components of the financial year:
Standardised Period: The financial year provides a standardised period of 12 months for financial reporting, which helps businesses and governments to compare financial performance across different periods.
Tax Calculation: The financial year is used to calculate income tax for individuals and businesses. The income accumulated during the financial year is considered for calculating income tax, and the tax returns must be filed by the due date.
Financial Statements: Companies use the financial year to prepare their financial statements and annual reports, which provide a comprehensive view of the company’s financial performance over the 12-month period.
Budget Preparation: Governments prepare their annual budgets during the financial year, which outline the revenue and expenditure for the upcoming year.
Planning and Forecasting: The financial year allows businesses and governments to plan and forecast their finances for the upcoming year based on the previous year’s financial performance.
Compliance: The financial year ensures compliance with accounting and tax laws and regulations, which helps to maintain financial transparency and accountability.
Performance Evaluation: The fiscal year allows businesses and governments to evaluate their financial performance and make necessary adjustments to improve their financial health.
Moreover, the financial year is highly relevant for a country as it is the period during which the government prepares its budget and plans its financial policies. The budget outlines the government’s revenue and expenditure for the upcoming year and provides a roadmap for the country’s economic policies and priorities. More in a sense, The fiscal year also plays a critical role in determining the country’s tax policies, which are used to raise revenue for the government.
It also must pin down that the fiscal year is also important for businesses operating in the country. It provides a standardised financial reporting period, allowing businesses to compare their financial performance over different periods. The year also allows businesses to plan and forecast their finances for the upcoming year based on the previous year’s financial performance.
Calculating income tax for individuals and businesses during each fiscal year helps to maintain financial transparency and accountability. It ensures compliance with accounting and tax laws and regulations, which is essential for the smooth functioning of the economy.
Acquiring knowledge about tax laws, financial statements, business law, budgeting, and other financial matters is essential, even for common people. It is necessary to be familiar with income tax and related matters. Moreover, for those who aspire to become accountants, it is vital to know the rules and regulations regarding financial aspects, tax filing, financial budgeting, etc. This knowledge can increase their chances of getting a job.
Finprov, a credible accounting, financial, and upskill course provider, offers excellent opportunities for career aspirants. Our courses, such as Gulf VAT, Income Tax, Business Law, GST, etc., provide a basic understanding of financial matters. Additionally, our team offers courses like CBAT, PGBAT, PGDIFA, DIA, PG Diploma in Digital Marketing & E-commerce certification programs, Zoho Books, SAP FICO, Tally Prime, and various other courses that can make you an undeniable aspirant in the job market.
We provide practical-oriented training, expert faculty support, and an updated curriculum, making us one of the best service providers for job aspirants in different fields.
