March 31 deadline: Key income tax and GST tasks to finish before the financial year ends

With the financial year drawing to a close, March 31 marks a critical cut-off for both individual taxpayers and businesses to complete a range of tax-related actions. From locking in deductions to ensuring compliance, missing these timelines could lead to higher tax outgo, penalties, or delayed refunds.

Final push for tax-saving investments

For those opting for the old tax regime, this is the last opportunity to claim deductions under Section 80C. Investments in instruments such as the Public Provident Fund (PPF), Sukanya Samriddhi Yojana (SSY), and the National Pension System (NPS) must be completed—and credited—before March 31 to be eligible for the current financial year.
Delays beyond the deadline will push the benefit into the next year.

Submit proofs to avoid excess TDS

Employees who have already declared tax-saving investments must ensure they submit supporting documents to their employers within the payroll cut-off. Failure to do so may result in higher tax deducted at source (TDS) in the final salary cycles of the year, affecting short-term cash flows, even though refunds can be claimed later.

Last date for updated returns (ITR-U)

March 31 is also the final deadline to file an updated income tax return for assessment year 2021–22. This provision allows taxpayers to correct omissions or under-reporting of income. While it involves additional tax and penalties, it can help avoid stricter scrutiny or larger liabilities later.

Plan capital gains and losses

Taxpayers may review their portfolios to optimise capital gains tax. Adjusting gains against carried-forward losses before the year-end can help reduce overall tax liability.

Apply for lower or nil TDS certificate

Those eligible for reduced tax deduction can apply for a lower or nil TDS certificate (Form 13) before the new financial year begins. This ensures that lower withholding rates apply from April onwards.

Depreciation benefits for businesses

Businesses must ensure that any capital assets intended for depreciation claims are put to use before March 31. Only assets operational within the financial year qualify for depreciation benefits.

GST compliance checklist

Reconcile returns and books

Businesses should reconcile GST filings—GSTR-1 and GSTR-3B—with financial records and GSTR-2B. Discrepancies must be identified and corrected in the March returns to avoid future notices.

Review input tax credit (ITC)

A detailed review of ITC claims is essential to ensure eligibility and proper documentation. Any ineligible or blocked credits under Section 17(5) should be reversed if incorrectly claimed.

File LUT for next financial year

Exporters planning to supply goods or services without payment of IGST must file a fresh Letter of Undertaking (LUT) before April 1 for FY 2026–27.

Prepare for e-invoicing mandate

Businesses that crossed the ₹5 crore turnover threshold in FY 2025–26 must be ready for mandatory e-invoicing from April 1, 2026. This includes upgrading systems and training teams for compliance.