Publication details: Money Manager – CNBC Bajar – 16-02-2016

Responses, opinion and view from Kartik Jhaveri.

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What are some of the things one must keep in mind before it is 31st March?

Let’s begin by talking about business owners. What must they do before its March and specifically 31st March.

  1. Provisional Profit and loss Account – Make this excel based and keep checking income and expenses on an ongoing basis. Take appropriate action such as;
  • Investment: The profit estimate helps in evaluating the money which is available for Investment as this improves networth.

  • Tax Planning

    • Collation of capital gains for tax planning must be done. Take advantage of short term capital loss if any.

    • Advance Tax should be paid in instalments on the profit estimated, as per the due dates provided by the IT department if your total tax liability is Rs 10,000 or more in a financial year. If not paid as per the schedule specified, interest u/s 234B and C has to be paid.

    • Tax deducted at source should be checked. The TDS statement can be accessed from the Income Tax website through 26AS. The 26AS statement also helps in reconciling the total income which we have arrived at with the Income reflecting in the TDS statement. The arrived Income should be equal to/more than the income reflecting in 26AS

    • Check on contra entries to avoid unnecessary transactions and close off any open transactions in this years itself.

    • Check on loan entries if any and try to close off in the year itself.

  1. Should one check on debtors and creditors position?

  • Debtor’s position should be checked at the end of the year. Any receivable like to be added to this year’s income?
  • If you have credit period built in for creditors then use the idle cash management strategy.
  1. Should one prepay loans at this time? Would that be a good idea?

  • A review of the existing liabilities should be conducted. If there are surplus funds some repayment / prepayment may be considered. For instance housing loans can continue however car loans and personal loans can be considered for repayment.

  • Also check the status of the OD account and LAS account.

  • Compare interest rate prevailing and interest rate for a new loans for new clients – can you ask for a reduction?

  1. What are some of the investment related actions to be undertaken by March?

  • Tax saving Investments also need to be made for availing the tax benefits. There are many tax saving instruments available some of which are ELSS, PPF, NPS, NSC, etc

  • If you have invested in bond funds and are planning to sell anything before March, estimate taxes before doing so. If you are using SWP facility for earning monthly income then make sure you know the capital gain you have to pay.

  • Review your bank statement for any anomalies.

  • Equity review – ideally in June but it is a good idea to study this in March too. Settle account with brokers.


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