Financial Year-End Tax Compliance Checklist for Businesses in India
Last reviewed: July 2026, by MBG’s Direct Tax advisory team, current as of the Income Tax Act, 2025 transition effective 1 April 2026.
As the financial year draws to a close, businesses operating in India need to work through a defined set of income tax compliance actions before the year-end deadline. This checklist covers the recurring obligations that apply at each year-end closing, updated to reflect the current framework under the Income Tax Act, 2025.
Note on terminology: With the Income Tax Act, 2025, in force from 1 April 2026, “Previous Year” and “Assessment Year” are now termed “Tax Year.” This checklist uses Tax Year alongside the familiar FY/AY references for clarity during the transition.
1. Investment and Donation Deductions Under the Old Regime
Businesses and individuals opting for the old tax regime and claiming deductions under Sections 80C, 80D, and 80G must complete eligible investments or donations before the financial year closes. These deductions flow into the income tax filing for the relevant tax year.
2. Advance Tax Payment Deadlines
Businesses that miss the fourth advance tax installment deadline (15 March) must pay any shortfall before the financial year ends to minimize interest liability under Sections 234B and 234C. See our detailed breakdown of advance tax payment deadlines and compliance requirements for installment-wise timing.
3. Filing an Updated Return (ITR-U) Under Section 139(8A)
The window to file an updated return was extended by the Finance Act, 2025, from 24 months to 48 months from the end of the relevant assessment year. Additional tax payable scales with how late the updated return is filed:
- Within 12 months: 25% additional tax on tax and interest due
- Within 24 months: 50%
- Within 36 months: 60%
- Within 48 months: 70%
An ITR-U cannot be filed if a Section 148A show-cause notice has been issued after 36 months from the end of the relevant assessment year, unless a later order finds the notice unwarranted.
4. MSME Payment Compliance Under Section 43B(h)
Timely payment to Micro and Small Enterprises (MSEs) remains a live year-end risk area under Section 15 of the MSMED Act, 2006:
- Without a written agreement, payment within 15 days
- With a written agreement, payment within 45 days
Non-compliance leads to disallowance of the expense under the Income-tax Act. This remains unchanged under the 2025 Act.
5. TDS on Purchases Under Section 194Q
Buyers with turnover exceeding ₹10 crore in the preceding year must deduct TDS at 0.1% on purchases from a single seller exceeding ₹50 lakh in the year. This obligation continues unchanged.
Important: The corresponding seller-side TCS obligation under Section 206C(1H) was withdrawn with effect from 1 April 2025 and has not applied since FY 2025–26. If your billing or ERP systems are still applying a 206C(1H) TCS flag, this is a compliance and reconciliation risk; disable the flag and reconcile any residual entries before year-end close.
6. TDS Declarations from Transporters Under Section 194C
Obtain declarations from transporters confirming non-deduction of TDS where they own 10 or fewer vehicles at the time of the transaction.
7. TDS/TCS Reconciliation Before Year-End Close
Reconcile all TDS and TCS credits in the books against Form 26AS and the Annual Information Statement (AIS) before closing the year to avoid mismatches during year-end filing and audit support.