Action Points Taxpayers Must Complete Before March 31, 2026

As the financial year 2025–26 draws to a close, businesses and tax professionals are gearing up to ensure full compliance and smooth transition into the new fiscal year.

Experts have outlined critical action points that must be addressed on or before March 31, 2026, to avoid future disputes, penalties, and compliance gaps.

Focus on TDS Changes Under New Tax Law

One of the key priorities is updating the Chart of Accounts and ledgers in accounting systems such as Tally or Zoho. This becomes crucial in light of the newly introduced TDS provisions under Sections 392 and 393 of the Income Tax Act, 2025. Proper mapping from the beginning will help prevent accounting mismatches and return filing issues in FY 2026–27.

Advance Tax and Transfer Pricing Under Scrutiny

Taxpayers are advised to carefully review advance tax liabilities and promptly inform clients in writing in case of any shortfall. Special attention is required in transfer pricing matters, including re-evaluation of year-end provisions, mark-ups, and unbilled revenues.

Time-Barred TDS Defaults Need Immediate Attention

Pending TDS return-related defaults and liabilities, especially those nearing limitation periods, must be cleared on priority. Cases up to Quarter 3 of FY 2023–24 require urgent review to avoid irreversible consequences.

Foreign Transactions: Documentation Now Mandatory

Companies dealing with foreign parties must ensure mandatory collection of TIN, TRC, and other details at the agreement stage itself. This requirement applies to both existing and new foreign entities and aligns with compliance under Forms 15CA and 15CB.

Balance Confirmations and MSME Compliance

Obtaining balance confirmations and ledger confirmations is essential for accurate financial reporting. Additionally, businesses must review MSME payment timelines, ensuring dues are cleared within the prescribed 15/45-day limits to avoid reporting and compliance issues.

Banking and Investment Records for Closure

For year-end closure and reconciliation, companies should collect bank statements, fixed deposit statements, and capital gains statements. These documents are vital for tax computation and audit readiness.

LUT Filing and Export Compliance

Exporters must ensure that Letters of Undertaking (LUT) for FY 2025–26 are properly filed and also prepare for LUT compliance for FY 2026–27. Pending export cases should be reviewed carefully.

Stock Verification and E-Invoicing Readiness

A physical stock verification as of March 31, 2026, is critical, along with maintaining proper documentation. Businesses must also check e-invoicing applicability from April 1, 2026, particularly if turnover exceeded ₹5 crore for the first time. Implementation of the 6-digit HSN code requirement should also be verified.

New Financial Year Preparations

Before entering FY 2026–27, companies should create a new invoice series to ensure compliance from day one. Additionally, businesses must evaluate their eligibility for Composition Scheme, QRMP Scheme, or ISD registration, depending on their operational needs.

Timely Action is Key

Experts emphasize that proactive compliance and timely execution of these action points will help businesses avoid litigation, penalties, and operational disruptions. With increasing scrutiny and evolving regulations, year-end preparedness is no longer optional but essential.