March 31, 2026 deadline for key Income Tax and GST compliances: Time to take action now to prevent penalties and late fees

As the financial year 2025-26 draws to a close, taxpayers and businesses are facing a critical deadline of March 31, 2026, for several essential Income Tax and GST-related tasks. Timely completion of these compliances is vital to avoid interest, penalties, and the loss of potential tax benefits.

Key Income Tax Compliances

An tax expert, highlights several critical procedures that must be finalized by the month-end:

• File Updated Returns (ITR-U): March 31 is the final deadline to file an updated return for the Assessment Year 2021-22. This is a crucial opportunity for those who missed reporting income or filed under the wrong tax rate. While filing ITR-U requires paying additional tax and penalties, it helps avoid more severe scrutiny and larger penalties from the tax department later.
• Lower/Nil TDS Certificate (Form 13): Taxpayers should apply for this certificate before the new financial year begins. This allows deductors to apply a lower withholding rate starting from April.
• Capital Gains & Loss Optimization: Taxpayers are advised to evaluate the sale or retention of capital assets. Utilizing brought-forward losses against current gains can significantly optimize tax liability.
• Depreciation Planning: For businesses, capital assets must be “put to use” before March 31 to claim depreciation benefits for the current year.
• Tax-Saving Investments: Individuals under the old tax regime must ensure all investments in PPF, NPS, or Sukanya Samriddhi Account (SSA) are completed by this date to claim deductions under Section 80C.

Key GST Compliances

Another tax experts, outlines the necessary steps for businesses to remain GST-compliant:

• Reconciliation of Books: It is essential to reconcile GST returns (GSTR-1 and GSTR-3B) with financial records and GSTR-2B. Any discrepancies should be corrected in the March 2026 returns.
• ITC Review: Conduct a thorough review of Input Tax Credit (ITC) to ensure all claims are eligible and properly documented. Blocked credits under Section 17(5) must be identified and reversed if incorrectly claimed.
• LUT Filing for FY 2026-27: Exporters intending to supply goods or services without paying IGST must file a fresh Letter of Undertaking (LUT) for the upcoming financial year before April 1.
• E-invoicing Readiness: Businesses that crossed the Rs 5 crore turnover threshold in FY 2025-26 must prepare for mandatory e-invoicing starting April 1, 2026. This includes system alignment and staff training to ensure a seamless transition.

Why It Matters

Missing these deadlines can result in permanent loss of tax credits, the inability to revise previous errors, and the imposition of late fees and interest. Taking proactive steps now ensures businesses and individuals close the financial year with clarity and legal validity.

Source from: https://economictimes.indiatimes.com/wealth/tax/march-31-2026-deadline-for-key-income-tax-and-gst-compliances-time-to-take-action-now-to-prevent-penalties-and-late-fees/articleshow/129846875.cms