Year-end tax planning for small businesses in India: what to do before 31 March

The financial year ends on 31 March, and the last two weeks of it decide how much tax you pay for the whole year. A short, focused checklist — advance tax, asset purchases, input credit and stock — can save you real money. Here's what to do before the year closes.

1. Clear your advance tax by 15 March

If your tax liability after TDS is ₹10,000 or more in a year, you must pay advance tax in four installments:

Compute your final year-end income, factor in Q4 expenses and revenue, and clear any shortfall by 15 March — otherwise interest under Sections 234B and 234C applies.

2. Buy and put assets to use before 31 March

Depreciation is claimed in the year an asset is put to use. If it is used for less than 180 days in the year of purchase, only half the normal depreciation is available that year — so plan machinery and vehicle purchases so they are installed and running before the year-end, or time larger purchases early in the next financial year if that works better for your cash flow.

3. Reconcile GST input credit before you lose it

Input tax credit for a financial year must be claimed by the earlier of 30 November of the following year or the date you file GSTR-9. Reconcile your purchase register against GSTR-2B now, chase suppliers whose invoices are missing, and act on pending invoices in the Invoice Management System — a credit you do not claim is permanent money lost.

4. Do a physical stock take

Closing stock is valued at the lower of cost or net realisable value, and it directly moves your gross profit. A quick physical count before 31 March, with damaged or slow-moving stock written down properly, keeps the valuation honest — and honest valuations survive scrutiny.

5. Decide on the old regime and Section 44AD

If you claim deductions — Section 80C (up to ₹1.5 lakh: PPF, ELSS, life insurance, home loan principal), 80D (health insurance premiums) or 80G (donations) — compare the old and new regimes before filing, since the new regime is the default. And if you are an eligible proprietor, HUF or partnership firm (not an LLP), Section 44AD lets you declare business income presumptively — 8% of turnover on cash receipts, 6% on digital receipts, up to the ₹2 crore threshold — and skip bookkeeping and audit requirements entirely. Most small businesses under that turnover should at least run the numbers.

The two-week checklist

• Advance tax: compute, pay the balance, or adjust estimated income
• Assets: confirm anything purchased is invoiced, installed and running by 31 March
• ITC: reconcile purchases with GSTR-2B and resolve mismatches
• Stock: count physically and value at lower of cost or NRV
• Investments: fund 80C/80D before the year ends if you are in the old regime

Do these before 31 March and the tax you pay will be the tax you owe — not more.