As we step into the new financial year starting from 1st April 2024, it’s crucial for businesses and taxpayers to stay informed about the latest tax regulations and compliance requirements. Here’s a comprehensive guide to key tax compliance measures you need to be prepared for:
1. Applicability of Section 43B(h) – Disallowance of Expense on Non-Payment or Late Payment to Micro and Small Enterprises
Section 43B(h) of the Income Tax Act comes into effect from 1st April 2024. This provision focuses on the disallowance of expenses incurred by businesses on non-payment or late payment to Micro and Small Enterprises.
Read More: SME Timely Payments Alert: Make Payments by March 31, 2024 to ensure Section 43B(h) Compliance
Businesses need to ensure timely payments to avoid any disallowances under this section.
2. Applicability of TDS U/S 194Q and TCS U/S 206C(1h)
a. TDS U/S 194Q: Businesses with a turnover exceeding Rs. 10 crores in the previous financial year need to deduct 0.1% of the sum exceeding Rs. 50 lakh as income tax when making payments to resident sellers for goods.
b. TCS U/S 206C(1h): Sellers with a turnover exceeding Rs. 10 crores must collect 0.1% of the sale consideration exceeding Rs. 50 lakh as income tax from buyers, excluding goods exported or covered under specific subsections.
3. Filing ITR-U for AY 2021-22
31st March 2024 marks the deadline for filing updated Income Tax Returns (ITR-U) for the Assessment Year 2021-22 (Financial Year 2020-21). It’s essential to complete this filing if necessary to ensure compliance with tax regulations.
4. Review 26AS/AIS/TIS
Taxpayers should reconcile TDS deductions as per their books with those reflected in Form 26AS/AIS. Any disparities may require communication with vendors to rectify the issues promptly.
5. Investment for Deduction u/s 80C/80D
Taxpayers opting for the old tax regime should consider making investments under sections 80C, 80D, etc., before 31st March 2024 to avail of tax benefits.
In conclusion, staying updated with these tax compliance measures is vital for businesses and individuals to avoid penalties and ensure smooth operations in the upcoming financial year. Stay informed, plan ahead, and seek professional guidance if needed to navigate these changes effectively.
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