Importance of March

March plays an important role in the Indian Calendar and the Indian economy. The financial year in India is the period that begins in April of each calendar year and concludes in March of the next calendar year. Simply put, it is the fiscal year in which you earn revenue. 

There is a lot (replace a lot) that takes place in March due to which March is practiced as the concluding month of the administration, but the practice is kept alive due to several reasons. Some of the core reasons are:

1. In accordance with the harvest season, this month is also linked to the Hindu holiday of Vaisakha, often known as the Hindu New Year. March-April is the first month of the Hindu calendar. As a result, this is one of the reasons why the Indian government begins the fiscal year in April and ends it in March.

2. Other than that, the fiscal year follows the crop cycle. India is an agricultural country, employing two-thirds of its population. The income is computed using an estimate of the yields harvested in February and March. As a result, the government is able to define loss and profit by the end of March, and a new process for new crops is launched in April. Consequently, a two-month period provides the government with an indicator of whether revenue will increase or decrease. As a result, it is one of the key reasons why the fiscal year spans from April to March.

3. In India, the major festivals of Navratri and Diwali occur in October and November, respectively, and are followed by Christmas in December. At certain periods, the value of sales for retailers and the value of purchases for customers are both higher. They find it tough to conduct end-of-year accounting in the face of these enormous obligations. The financial year ends in March rather than December to avoid a collision. As a result, the fiscal year in India begins in April and ends on March 31.

Nonetheless, it should be noted that the Constitution includes no such provision for the fiscal year to begin in April. Instead, the General Provisions Act of 1897 perpetuates this practice. This is why private firms and organisations are not compelled to keep their books in accordance with the government's fiscal year. India's fiscal year goes from April to March, but it is not the only country that does so. Other countries that follow a similar trend include Canada, the United Kingdom, New Zealand, Hong Kong, and Japan.

The 31st of March plays an important role for all taxpayers. For ITR calculations, your investments made between April 1 and March 31 of the following year are considered. If you do not invest in your chosen income tax-saving investments by March 31, it will not fetch you any tax advantage, even if the ITR filing date is in July or extended further. 

If an assessee’s income other than salary is likely to exceed Rs. 10,000 throughout the fiscal year, he or she must settle advance tax dues by March 31. According to income tax rules, in the case of a salaried employee, the employer is required to deduct tax from their compensation based on the income tax slab, which is known as TDS (Tax Deducted at Source). If the assessee is a self-employed professional or has received money from other sources, he must compute the tax payable on all sources of income, taking all deductions into account, and if the tax liability exceeds Rs 10,000, he must pay the advance tax.

The 31st of March is a day for essential financial responsibilities to be met; transactions incurred up to the 31st of March must be recorded in the books of account on the basis of actual receipt and payment.

Things you must know and do before the Financial Year ends.

1. Calculate advance tax payable and payment of advance tax for the specified period as per rules and provisions of The Income Tax Act 1961 as amended from time to time.
2. Investment/Payment shall be made before 31st March to sax tax and claim for deduction allowed.
3. Valuation of inventories and Assets shall be done in order to plan future expansions of business either internally or externally.
4. Claim additional depreciation and incentives.
5. Find out the gain or loss from operating or running a business.
6. Valuation for preparation of income and expenditure account, Financial statements of the company, Cash-flow statement, and Fund-flow statement for computation of total income or loss from the business reporting, filing and disclosure.
7. Set off carry-forward losses from previous years and unabsorbed depreciation.
8. Clear loans payable or receivables to make financial statements positive and favourable and also to determine the perfect capital structure for the entity.
9. Calculation of Turnover for GST purposes and reconcile the Cash Ledger, Credit Ledger and Liability Ledger on the GST portal with their books of account as per Acts, rules and provisions made there under.

One should know the importance of March in order to organise their personal spending. For example, if you establish new financial resolutions on January 1 and begin investing immediately, your investments will be taxed according to the April-March cycle. As a result, your personal finances will become more complicated. Furthermore Every fiscal year, from April to March, tax returns are filed. The deadline for making Section 80C tax-saving investments, such as PPF, ELSS, and so on, is March 31. Any tax changes announced in the budget of any year apply to income earned beginning April 1 of the following year.

Yet, when it comes to Leave Travel Allowances (LTA), the cycle moves to the calendar year, and most leave entitlements at work follow a January-December calendar as well.

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