Compliance Checklist at yearend Closing at 31st March

Compliance Checklist to be done at year-end closing on 31st March

The company must ensure that the appropriate TDS, GST, ESI and PF has been taken and paid. Checking Closing Stocks as of March 31, 2025: The amount and item-by-item value of closing stocks as of March 31, are required in tax audit instances as well as for book closing. March is an important month when it comes to different deadlines for compliance with the Income Tax Act and the Goods and Services Act. To avoid heavy penalties, taxpayers must submit the necessary paperwork by the deadline. This Compliance Checklist to be done at yearend Closing at 31st March, based on the specific needs and requirements of your organization and industry.

Year-end closing checklist with all key compliance areas for the financial year ending 31st March 2025:

March 31st marks the close of the financial year in India, and it’s absolutely critical for individuals and businesses to wrap up essential financial tasks before the deadline.  Year-End Closing Checklist for FY 2024-25 (As on 31st March 2025)

1. Sales & Revenue

• ✅ Finalize and issue all pending invoices up to 31st March 2025.
• ✅ Reconcile sales with GSTR-1 & GSTR-3B.
• ✅ Ensure compliance with Ind AS/AS for revenue recognition.
• ✅ Identify & provide for bad debts based on age analysis and recovery chances.

2. Purchases & Expenses

• ✅ Record all pending supplier bills received up to 31st March.
• ✅ Match ITC claimed with GSTR-2B for March.
• ✅ Accrue unpaid expenses (audit fee, rent, utilities, etc.).
• ✅ Allocate prepaid expenses to future periods (e.g., insurance, AMC).

3. Payroll & Employee Compliance

• ✅ Process March salaries with appropriate PF/ESI deductions.
• ✅ Accrue for bonuses, gratuity, leave encashment as applicable.
• ✅ Deposit all statutory dues before the due dates.
• ✅ Deduct and deposit TDS on salaries under Section 192.

4. TDS & Income Tax Compliance

• ✅ Deposit any pending TDS deductions before 30th April to avoid interest.
• ✅ Reconcile TDS receivable with Form 26AS & AIS.
• ✅ Ensure advance tax liability is fully discharged before 15th March 2025.
• ✅ Rectify any defaults in TDS returns (24Q, 26Q, 27Q) using TRACES.

5. GST Compliance

• ✅ Reconcile GST payable as per books vs returns.
• ✅ Claim all eligible ITC before due date (due date of filing GSTR-3B for April 2025).
• ✅ Reverse ITC for unpaid invoices >180 days as per Rule 37.
• ✅ Issue debit/credit notes for adjustments before filing March GSTR-1.

6. Fixed Assets & Depreciation

• ✅ Update the Fixed Asset Register with purchases/sales till 31st March.
• ✅ Calculate depreciation under both:
  • Companies Act (Schedule II)
  • Income Tax Act (WDV as per Rule 5)
• ✅ Classify assets properly (plant, computers, furniture, etc.).
• ✅ Scrap/transfer obsolete assets and adjust accordingly.

7. Bank & Cash Reconciliation

• ✅ Perform bank reconciliation for all bank accounts till 31st March.
• ✅ Identify and clear unreconciled entries (especially stale cheques).
• ✅ Verify and record all petty cash transactions with proper bills.
• ✅ Account for bank charges, interest, ECS, etc., till year-end.

8. Inventory Management

• ✅ Conduct physical stock verification and reconcile with books.
• ✅ Provide for slow-moving/obsolete stock if needed.
• ✅ Match stock figures with books and GST filings.
• ✅ Apply correct valuation method (FIFO/WAC) consistently and disclose basis in notes to accounts.

9. Loans & Interest

• ✅ Reconcile loan accounts with confirmation from lenders.
• ✅ Ensure interest expense is booked correctly and TDS under 194A is deducted.
• ✅ Ensure all EMIs are accounted for and paid on time.
• ✅ Check compliance with loan covenants, if any (e.g., DSCR, Current Ratio).

10. Financial Statements & Statutory Compliance

• ✅ Draft provisional financials (P&L and Balance Sheet).
• ✅ Review all ledgers for anomalies and pass necessary journal entries.
• ✅ Ensure compliance with:
  • Companies Act disclosures
  • Securities and Exchange Board of India LODR filings (for listed companies)
• ✅ Evaluate tax planning options (e.g., 80JJAA, Sec 43B payments before 31st March).

11. Other Year-End Tasks- Others Complied related to Accounting & books Checklist

• ✅ Finalize & obtain statutory audit reports, internal audit, and cost audit (if applicable).
• ✅ Ensure timely:
  • Filing of DIR-3 KYC, MSME Form 1, DPT-3, etc., as applicable.
  • Filing of Form Ministry of Micro, Small and Medium Enterprises Half-Yearly Return for outstanding dues.
• ✅ Back up all accounting and statutory data securely.
• ✅ Obtain closing stock certificate from management or auditor.
• Make necessary year end provisions. Also, account for amortization, depreciation.
• Verify closing stock, cash balance, bank balance, inter branch balance.
• Collect Fixed Deposit statements from bank and account interest income.
• Double check the statutory compliances on all the transactions. (Eg: Tax Deducted at Source , Tax Collected at Source, Reverse charge mechanism )
• Account for foreign exchange fluctuations.
• Party Balance Confirmation with 3^rd parties.

Income Tax Compliance Checklist

• Make necessary investments eligible for deductions thereby reducing taxable income for Financial Year 20X1 20X2 and ultimately save tax. (Eg: Public Provident Fund, Life Insurance Corporation, Health Insurance, ELSS Mutual Funds etc.).
• Last chance to file updated income tax return for Financial Year 20X1 20X2 by paying 50% additional tax.
• Calculate tax liability and pay necessary advance tax.
• Last chance to file updated income tax return for Financial Year 2021-2022 by paying only 25% additional tax; thereafter, it would increase to 50% additional tax.
• Ensure 43B(h) compliance which deals with timely payment to Micro and Small Enterprises. Such payments have to be made within 45days or 15 days as applicable.

• If turnover for Financial Year 20X1 20X2 exceeds INR 10 Cr, then, Tax Deducted at Source provisions u/s 194Q, Tax Collected at Source provisions u/s 206C(1H) will become applicable for Financial Year 20X1 20X2.
• Obtain declarations from transporters for non-deduction of Tax Deducted at Source under section 194C.
• Reconcile and/or account for the Tax Deducted at Source and Tax Collected at Source credit in books of accounts.

Goods and Services Tax Compliance Checklist

1. Submit LUT for financial year 20X1-20X2. Letter of undertaking has to be submitted in case the GST taxpayer makes exports of goods/services or supplies to special economic zone units or developers without payment of Integrated Goods and Services Tax .
2. Application to opt for the composition scheme for financial year 20X1 20X2.
3. Goods Transport Agency Services providers need to file a declaration for opting to pay tax under forward charge mechanism for Financial Year 20X1 20X2. Recipients are recommended to obtain and maintain a record of such declaration from Goods Transport Agency to justify non-payment of tax under RCM.
4. If turnover for Financial Year 20X1 20X2 has exceeded INR 5 Crores for the first time since inception of Goods and Services Tax, then, generate and issue E-Invoice for supplies from 01st April.
5. In case payments to creditors are due for more than 180 days, then, Reverse the input tax credit availed on such transactions.
6. Start new invoice series from 01st April, unique for Financial Year 20X1 20X2.
7. Reconcile the data filed in Goods and Services Tax returns with books of accounts and pass necessary entries, if any. (Eg: Reconcile the turnover, Match balance in Cash Ledger / Electronic Credit with books of accounts, make necessary adjustment to Input Tax credit available in books but not appeared in GSTR-2B, reverse the excess Input Tax credit claimed, if any, discharge the reverse charge mechanism liability if any, missed during the year, etc. )
8. Ensure proper documentation and reconciliation of ITC availed during the year. Identify and rectify any ineligible or wrongly claimed ITC.
9. Reconcile & or account for the Goods and Services Tax-TCS & Goods and Services Tax -TDS Credit in books of accounts.
10. Review transactions liable for reverse charge mechanism and ensure proper compliance. Determine any changes in RCM applicability and adjust processes accordingly
11. Ensure all GST returns for the current financial year are filed accurately and on time. Rectify any errors or discrepancies in previous returns. Verify that all eligible input tax credits (ITC) have been claimed.
12. Review sales and purchases data to determine the GST liability for the year. Reconcile GST liability with financial statements.

In conclusion

This checklist is generic and may need to be adapted based on the specific regulations and requirements applicable to your jurisdiction and industry. above checklist, businesses can ensure effective accounting, Income tax, GST compliance and smooth transition to the new financial year, while also optimizing tax planning and minimizing risks of non-compliance. Please be aware, nevertheless, that depending on stakeholder representations and current events, these deadlines may be extended. You can be sure that we will promptly notify you of any modifications or extensions in order to maintain your compliance. Recall that timely filing is essential to avoiding substantial penalties and maintaining a seamless company operation.