Things Your Business Must Do Before 31.03.2026

March 31st is not just the last day of the financial year. For your business, it is a legal deadline, a financial checkpoint, and a compliance window — all rolled into one single date.

Every year, thousands of business owners in India pay unnecessary penalties, lose input tax credits worth lakhs, or receive tax department notices not because they did something wrong, but simply because they missed a deadline or skipped a year-end check.

The GST law, Income Tax Act, and Companies Act have very specific actions that must be completed on or before 31st March. Once this date passes, many windows close permanently and you cannot go back and fix them.

This guide covers every critical action in plain language: What it is → What you must do → What happens if you don't.

SECTION A - GST

01. Letter of Undertaking (LUT) — Form RFD-11 for FY 2026-27

📅 File Before 31st March 2026 | Who: Exporters

If your business exports goods or services, you are allowed to export without paying IGST — provided you have filed a Letter of Undertaking (LUT) on the GST portal for that financial year. LUT must be filed afresh for every new year. For FY 2026-27, the LUT must be filed on or before 31st March 2026 to export without GST payment from 1st April 2026 onwards.

⛔ IF YOU MISS THIS

You will be required to pay IGST upfront on every export invoice from 1st April 2026, and then apply for a refund separately. This blocks your working capital — sometimes for months — until the refund is processed. Your export pricing and cash flow take a direct hit.

✅ ACTION

GST Portal → Services → User Services → Furnish Letter of Undertaking → Select FY 2026-27 → Submit. The process takes under 10 minutes. If the deadline has passed, you must pay IGST on exports and file a refund application under Section 54 of the CGST Act.

02. Reconcile GSTR-1 vs GSTR-3B vs Your Books

📅 Before Filing March Return | Who: All GST Taxpayers

Throughout the year, small errors creep in — a wrong GST rate, a missing invoice, an uncredited credit note. March is your last window to catch and correct all such errors for FY 2025-26. After you file March 2026 GSTR-1 and GSTR-3B, that window closes permanently. Also reconcile e-Way Bill and e-Invoice data against your Sales Register — mismatches are the single biggest trigger for GST notices.

⛔ IF YOU MISS THIS

Unreconciled differences between GSTR-1, GSTR-3B, and your books result in tax demand notices, interest on short-paid tax, and penalties. Errors correctable for free in March become expensive disputes after the year closes.

✅ ACTION

Pull GSTR-1 and GSTR-3B data for April 2025 to February 2026. Compare with your sales register. Identify short-reported supply or excess ITC claimed. Correct in March 2026 return.

03. ITC Reconciliation — GSTR-2B vs Purchase Register

📅 Before Filing March Return | Who: All GST Taxpayers

You can only claim ITC if your supplier has filed their return and the invoice appears in your GSTR-2B. Any ITC claimed without GSTR-2B support is recoverable by the department. Also review expense ledgers for eligible ITC you may have missed — GST on bank charges, freight, maintenance, professional fees etc.

⛔ IF YOU MISS THIS

Excess ITC without GSTR-2B support gets reversed with 18% interest. Missed ITC on valid purchases means you permanently overpaid GST — that money is gone after the annual deadline passes.

✅ ACTION

Match your purchase register line by line with GSTR-2B for the full year. Check expense ledgers for missed ITC. Correct before filing March 2026 GSTR-3B.

04. Reverse ITC on Unpaid Vendor Bills — Rule 37 (180-Day Rule)

📅 Mandatory Before Year Close | Who: All GST Taxpayers

If you claimed ITC on a vendor invoice but have not paid that vendor within 180 days from the invoice date, that ITC must be reversed. Run an aging report of all outstanding vendor payables as on 31st March 2026 and identify invoices 180+ days old where ITC was already claimed.

⛔ IF YOU MISS THIS

If the department detects this during scrutiny, forced reversal + 18% interest from the original ITC claim date applies. For businesses with large payables, this can run into significant amounts.

✅ ACTION

Generate an aging report, identify 180+ day unpaid invoices where ITC was claimed, and reverse in March 2026 GSTR-3B. Once you pay the vendor later, you can re-claim the ITC.

05. Check and Pay All Pending RCM Liability

📅 Clear Before 31st March | Who: All RCM Transactions

Under Reverse Charge Mechanism, you pay GST as the buyer not the supplier. Common RCM transactions: freight to unregistered GTA, advocate fees, import of services, director sitting fees, security services, rent-a-cab. Review all FY 2025-26 expenses and confirm RCM tax has been calculated, paid in cash (not ITC), and reported in GSTR-3B.

⛔ IF YOU MISS THIS

Unpaid RCM = GST demand + 18% interest + penalty up to 100% of tax. Critical: RCM cannot be paid through ITC — cash only. One of the most expensive oversights for Indian businesses.

✅ ACTION

Go through expense ledgers: freight, legal, imported services, director fees, security, rent-a-cab. Calculate RCM for the full year. Pay any shortfall before 31st March through cash ledger.

06. GTA — Verify Annexure V / VI Forward Charge Status

📅 Verify Before 1st April 2026 | Who: GTAs and GTA Service Users

Goods Transport Agencies can opt to pay GST under Forward Charge for FY 2026-27 by filing Annexure V before 31st March 2026. If you use GTA services, check whether your transporter has opted for Forward Charge or RCM — this decides who pays the GST on freight for the entire next year.

⛔ IF YOU MISS THIS

A GTA that misses this declaration is locked under RCM for the full year. A business that fails to check its transporter's status may incorrectly omit RCM liability and face a demand notice.

✅ ACTION

GTAs: File Annexure V on the GST portal before 31st March. Transport service users: Ask your transporter to confirm their FY 2026-27 GST payment method.

SECTION B - INCOMETAX  

 07. Updated ITR for AY 2021-22 — Last Ever Chance

📅 31st March 2026 — PERMANENT DEADLINE | Who: Taxpayers with Unreported Income

Section 139(8A) allows taxpayers to file an Updated Return (ITR-U) to declare previously unreported income — up to 5 years after original filing. For AY 2021-22 (FY 2020-21), 31st March 2026 is the absolute last date. After this date, the window closes permanently. No extension, no appeal, no second chance.

⛔ IF YOU MISS THIS

Any unreported income for FY 2020-21 can no longer be voluntarily disclosed. If the department detects it through AIR data or bank records, you face full tax + interest + penalty up to 200% of evaded tax. Voluntary disclosure via ITR-U attracts only 60% additional tax — far cheaper than getting caught.

✅ ACTION

Income Tax Portal → e-File → Income Tax Returns → File Updated Return (ITR-U). File immediately — do not wait until 31st March.

08. Form 67 — Foreign Tax Credit Claim for AY 2025-26

📅 Due: 31st March 2026 | Who: Businesses with Overseas Income

If your business earns income outside India and has paid tax in that country, you can claim credit for that foreign tax against your Indian tax liability — so the same income is not taxed twice. This is claimed through Form 67. For AY 2025-26, the filing deadline is 31st March 2026.

⛔ IF YOU MISS THIS

The foreign tax credit claim is entirely disallowed. You pay full Indian tax on income already taxed abroad. For businesses with significant overseas income, this double-taxation loss can run into several lakhs.

✅ ACTION

Collect the tax payment certificate from the overseas country. Log in to the income tax portal and file Form 67 before 31st March 2026.

09. Pay All MSME Vendor Dues — Section 43B(h)

📅 Pay Before 31st March 2026 | Who: All MSME Buyers

From AY 2024-25 onwards, if you purchase goods or services from a registered MSME and do not pay within 45 days (or 15 days if no written agreement), that expense is disallowed as a deduction in the year it is incurred. The deduction shifts to the year you actually make the payment.

⛔ IF YOU MISS THIS

Every rupee of unpaid MSME dues as on 31st March 2026 is added back to your taxable income for FY 2025-26. This directly increases your tax liability. For businesses with large MSME vendor bases, the additional tax can be substantial.

✅ ACTION

Identify all vendors with Udyam Registration. Check outstanding invoices. Pay all dues before 31st March. Ask vendors whose MSME status is unknown to share their Udyam certificate.

10. Tax-Saving Investments — Last Date for 80C, 80D, NPS

📅 Invest Before 31st March 2026 | Who: Old Regime Individual Taxpayers

If you are filing under the Old Tax Regime, investments made before 31st March 2026 qualify for deductions in FY 2025-26. Section 80C covers PPF, ELSS, LIC premiums, tuition fees (up to Rs.1.5 lakh). Section 80D covers health insurance premiums. Section 80CCD covers NPS contributions. Donations under 80G also qualify if made before year-end.

⛔ IF YOU MISS THIS

You permanently lose deductions for the year. At a 30% tax rate, not fully utilising 80C alone costs Rs.45,000+ in unnecessary tax. These cannot be carried forward — use-it-or-lose-it every year.

✅ ACTION

Check how much of 80C is already used (EPF, LIC etc.). Top up PPF or ELSS before 31st March. Pay pending health insurance premium. Contribute to NPS for 80CCD(1B) benefit up to Rs.50,000 over 80C. 

SECTION C - BOOKS OF ACCOUNTS

11. Physical Stock Verification

📅 Do in Last Week of March | Who: All Inventory Businesses

A physical count of every item you hold as stock on 31st March — finished goods, raw materials, WIP, packing materials, consumables, and goods lying with job workers or at customer premises. Closing stock directly determines your profit: higher closing stock = lower COGS = higher taxable profit. It is also the foundation for your statutory audit.

⛔ IF YOU MISS THIS

Physical-to-book differences create wrong profit, wrong tax, and audit qualification. In a GST or Income Tax audit, unexplained stock shortages are treated as suppressed income and taxed accordingly.

✅ ACTION

Plan the count for the last 3-4 days of March. Prepare count sheets per category. Document all shortages and excesses with explanations. Value closing stock at cost or NRV, whichever is lower — per AS 2.

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12. Bank Reconciliation Statement (BRS)

📅 As on 31st March 2026 | Who: All Businesses

Match your bank statement balance with your books as on 31st March. Identify outstanding cheques, deposits in transit, unrecorded bank charges, and any unidentified credits or debits in the account. Every bank account must be reconciled — current, savings, and overdraft accounts.

⛔ IF YOU MISS THIS

Unreconciled bank differences distort the year-end balance sheet, affect your bank borrowing credibility, and delay the statutory audit. Long-pending items are a red flag for possible fraud or accounting errors.

✅ ACTION

Download bank statements for all accounts. Reconcile systematically. Cheques uncleared for 6+ months should be reversed after informing the payee. Flag unidentified bank credits for investigation.

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13. Debtor and Creditor Balance Confirmation

📅 Send Before 25th March | Who: All Businesses

Send year-end balance confirmation requests to your key customers (debtors) and suppliers (creditors) asking them to confirm the balance in their books matches what you show in yours. This is a standard audit procedure under SA 505 and protects you from disputes, billing errors, and bad-debt surprises.

⛔ IF YOU MISS THIS

Your auditor may issue a qualified report citing absence of third-party confirmations. Hidden bad debts stay buried, inflating your asset base and reported profit — misleading banks and investors.

✅ ACTION

Extract provisional balances as on 28th February. Send email or WhatsApp confirmation requests to your top 20 parties. Identify overdue debtors and make provisions for bad/doubtful debts before closing March.

14. Book All Expense Provisions and Accruals

📅 Before Closing March Books | Who: All Businesses

Any expense that belongs to FY 2025-26 must be recorded in your accounts before closing March books — even if the invoice has not yet arrived or the payment has not been made. Common items: salary payable for March, audit fees, electricity bill, rent, interest on loans, employee leave encashment, bonus, gratuity, and all professional service fees.

⛔ IF YOU MISS THIS

Understated expenses = overstated profit = excess tax paid. Also creates period-mismatch in next year P&L. For companies, understated provisions mislead directors, lenders, and investors on the true financial position.

✅ ACTION

Review every overhead line item. Identify what has been incurred but not yet invoiced or paid. Pass provision journal entries before locking the March ledger. Review gratuity/leave actuarial estimates if covered under AS 15/Ind AS 19.

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15. Fixed Assets Register — Verification and Depreciation

📅 Before Finalisation | Who: All Businesses

Physically verify assets listed in your Fixed Assets Register against what exists on the ground. Update FAR for any assets added, sold, scrapped, or written off during the year. Calculate full-year depreciation under Companies Act 2013 (Schedule II) and separately under the Income Tax Act (WDV block method) for tax computation purposes.

⛔ IF YOU MISS THIS

Wrong depreciation = wrong profit = wrong tax. Claiming depreciation on ghost assets is a significant statutory audit risk and can result in audit qualification or director liability under Schedule II.

✅ ACTION

Physical verification of all assets. Update FAR with additions and deletions. Pass depreciation entries in March. Prepare a separate tax depreciation working (WDV method, block-wise) for ITR computation.

SECTION D - COMPANIES ACT & SECRETARIAL COMPLIANCE 

16. CSR Spending — Complete Obligations Under Section 135

📅 Due: 31st March 2026 | Who: Covered Companies

Companies with net worth >= Rs.500 crore, turnover >= Rs.1,000 crore, or net profit >= Rs.5 crore in the preceding 3 years must spend 2% of average net profit on approved CSR activities. This spending must happen before 31st March 2026 to count for FY 2025-26.

⛔ IF YOU MISS THIS

Unspent CSR funds must be transferred to a designated Unspent CSR Account within 30 days of year-end (by 30th April 2026). Non-transfer attracts penalty — up to twice the unspent amount or Rs.1 crore (lower of the two) — on both the company and its officers.

✅ ACTION

Check actual spend vs. the 2% obligation. If there is a shortfall that cannot be spent before 31st March, transfer to the Unspent CSR Account by 30th April and disclose in the Board Report.

17. Board Meetings

📅 Must Be Verified Before 31st March 2026 | Who: All Companies (excl. OPC)

Every company must hold at least 4 board meetings in a every year with a maximum gap of 120 days between consecutive meetings. If your third board meeting was held in December 2025 or later, the 4th meeting must be held before 31st March 2026. 

⛔ IF YOU MISS THIS

Non-compliance with Section 173 of Companies Act 2013: penalty of Rs.25,000 on the company + Rs.5,000 per officer in default. Repeated defaults can lead to director disqualification.

✅ ACTION

Issue board meeting notice at least 7 clear days in advance. Circulate agenda and papers. Hold the meeting. Prepare and approve minutes within 30 days of the meeting.

18. Director KYC — Check DIR-3 KYC Status

📅 Verify Before Filing Season | Who: All Directors with Deactivated DIN

Every director holding a DIN must complete DIR-3 KYC annually (normal due date: 30th September). If it was missed, the DIN is deactivated. With a deactivated DIN, the director cannot sign any company documents, resolutions, or MCA forms. Since year-end ROC filings are coming up, verify all director DINs now.

⛔ IF YOU MISS THIS

Company cannot file annual returns or financial statements on MCA portal with a deactivated DIN. This cascades into penalty for late ROC filings on top of the DIR-3 KYC late fee of Rs.5,000.

✅ ACTION

Check all DIN statuses on the MCA portal immediately. If any DIN is deactivated, file DIR-3 KYC Web with Rs.5,000 late fee to reactivate. Do not wait until the AGM filing season.

SECTION E - HR & PAYROLL 

19. Form 12BB — Collect Final Investment Proof from Employees

📅 Before Processing March 2026 Payroll | Who: All Employers

Collect final investment declarations and proofs from all employees using Form 12BB before processing the March 2026 salary. This allows you to compute the correct TDS for the full year. Any excess deduction or shortfall from earlier months is adjusted in the final salary — making March the annual true-up month for employee tax.

⛔ IF YOU MISS THIS

Excess TDS: employees lose cash unnecessarily and must wait for ITR refund. Short TDS: employer becomes an assessee-in-default and faces interest under Section 201(1A) and penalty for under-deduction — even if the employee eventually pays the tax.

✅ ACTION

Circulate Form 12BB template to all employees. Collect with supporting documents. Compute the final annual tax. Adjust TDS in March salary to absorb any excess or shortfall. Issue Form 16 Part B after year close.

SECTION F - GST BEGINNING OF YEAR CHECKLIST FY 2026-27

20. Reset Invoice Numbering from 1st April 2026

📅 Effective: 1st April 2026 | Who: All GST Registered Businesses

GST rules require each financial year to have its own fresh invoice series. From 1st April 2026, invoice numbers must restart. The format is flexible — sequential numbers, alphanumeric codes, prefix-year combinations — but it must be a new series distinct from FY 2025-26.

⛔ IF YOU MISS THIS

Continuing the old series causes GSTR-1 mismatches and e-invoice generation errors at the IRP portal. Customer's ITC can be affected. Departmental notices for invoice number irregularities are common.

✅ ACTION

Update invoice series configuration in your billing/accounting software before 31st March. Inform the accounts team. Test the first invoice of the new year before go-live.

21. E-Invoicing — Check if AATO Crosses Rs.5 Crore This Year

📅 Mandatory from 1st April 2026 | Who: Newly Covered Businesses

E-invoicing — generating an Invoice Reference Number (IRN) from the Invoice Registration Portal is mandatory if your AATO exceeds Rs.5 crore in the previous financial year. Businesses whose FY 2025-26 AATO crosses Rs.5 crore for the first time must implement e-invoicing from 1st April 2026.

⛔ IF YOU MISS THIS

Invoices without an IRN are treated as invalid under GST law. Your customer cannot claim ITC on such invoices. Penalty: Rs.10,000 per invalid invoice. Payment collection gets stuck as buyers refuse to pay without valid e-invoices.

✅ ACTION

Calculate provisional AATO for FY 2025-26 now. If it exceeds Rs.5 crore, register on the IRP portal (einvoice1.gst.gov.in) and configure your accounting software for auto-IRN generation before 1st April.

22. 30-Day IRP Upload Rule — AATO Above Rs.10 Crore

📅 Per Invoice — Strict Limit | Who: AATO > Rs.10 Crore

If your turnover exceeds Rs.10 crore, invoices must be uploaded to the IRP portal within 30 days of the invoice date. The portal will not generate an IRN for any invoice older than 30 days. There is no grace period, no override, and no exemption.

⛔ IF YOU MISS THIS

IRP blocks IRN generation for late invoices. Without an IRN, the invoice is legally invalid. Buyers block payments, your ITC chain breaks, and you face penalty per invalid invoice.

✅ ACTION

Build an internal SOP: all invoices uploaded to IRP within 7 days (leaving a 23-day buffer). Configure pending-IRN alerts in your accounting software. Assign a responsible person to monitor this daily.

23. Update HSN Codes — 4 / 6 / 8 Digit Requirement for FY 2026-27

📅 Effective: 1st April 2026 | Who: All GST Taxpayers

HSN codes must appear on every B2B invoice and in GSTR-1. Required digit count based on previous year AATO: up to Rs.5 crore = 4-digit; Rs.5-50 crore = 6-digit; above Rs.50 crore = 8-digit. Since AATO changes every year, many businesses move to a higher digit requirement on 1st April without realising it.

⛔ IF YOU MISS THIS

Incorrect HSN digits cause GSTR-1 filing errors, e-invoice rejections at the IRP, and departmental notices. Penalty: Rs.50,000 per non-compliant return. Also causes ITC mismatch for your customers.

✅ ACTION

Calculate FY 2025-26 AATO. Determine the correct digit level. Update your product/service master in the accounting software with the required HSN codes before 1st April 2026.

24. QRMP Scheme — Opt-In or Opt-Out for FY 2026-27

📅 Due: 30th April 2026 | Who: AATO up to Rs.5 Crore

QRMP (Quarterly Return Monthly Payment) allows businesses with turnover up to Rs.5 crore to file GSTR-1 and GSTR-3B quarterly instead of monthly, while paying tax monthly through PMT-06. Your current selection continues into FY 2026-27 unless you actively change it by 30th April 2026.

⛔ IF YOU MISS THIS

Failing to change your QRMP election locks you into the current option for the full FY 2026-27. You lose the flexibility to optimise compliance frequency for the year ahead.

✅ ACTION

If you have healthy ITC and prefer less frequent filing, opt for QRMP. If you have cash tax liability most months, monthly filing gives better cash flow control. Elect on the GST portal by 30th April 2026.

25. AATO Reassessment — Run All Threshold Checks for FY 2026-27

📅 Before 1st April 2026 | Who: All Taxpayers

Your FY 2025-26 AATO determines your compliance obligations for FY 2026-27 across multiple laws. Key thresholds: Rs.5 crore (e-invoicing, QRMP, HSN 6-digit), Rs.10 crore (30-day IRP upload, HSN 8-digit), Rs.50 lakh/month (Rule 86B cash payment). Calculate this before 31st March so you are ready from 1st April.

⛔ IF YOU MISS THIS

Operating under the wrong compliance level from 1st April creates immediate penalties and disruption — invalid invoices, blocked filings, ITC denial for customers.

✅ ACTION

Pull provisional FY 2025-26 sales data. Sum AATO across all your GSTIN registrations. Check against each threshold. Update your internal compliance checklist for the new year.

26. Rule 86B — 1% Minimum Cash Payment in GSTR-3B

📅 Monthly — Ongoing | Who: Taxable Supply > Rs.50 Lakh/Month

If your monthly taxable turnover exceeds Rs.50 lakh, at least 1% of your GST output tax liability for that month must be paid in cash — it cannot be fully settled through ITC. This rule was introduced to prevent fake ITC chains and applies every month without exception throughout the year.

⛔ IF YOU MISS THIS

GSTR-3B cannot be filed if the 1% cash condition is unmet. The blocked filing triggers late fees, interest, and a cascade of compliance delays for subsequent months.

✅ ACTION

Before filing GSTR-3B each month, check monthly taxable turnover. If it exceeds Rs.50 lakh, ensure the Electronic Cash Ledger has at least 1% of output tax in cash. Build this check into your monthly GST filing routine.

27. ISD Registration — Mandatory for Multi-State Companies

📅 Mandatory from 1-Apr-2025 | Who: Multi-GSTIN Companies

If your company has multiple GST registrations across states and the head office receives invoices for services that benefit all units (software subscriptions, auditor fees, centralised maintenance etc.), that ITC must be distributed to the branches through an Input Service Distributor (ISD) registration. Finance Act 2024 made ISD registration mandatory from 1st April 2025.

⛔ IF YOU MISS THIS

ITC on common services claimed without proper ISD registration can be denied or reversed for all branches. Penalty for non-registration under mandatory provisions of Section 20 CGST Act applies.

✅ ACTION

If HQ receives common service invoices shared across branches, register as ISD on the GST portal (Form GST REG-01). File GSTR-6 monthly to distribute ITC to each branch GSTIN.