Here’s a comprehensive tax compliance checklist tailored for small businesses in India. It covers essential tax obligations, deadlines, and best practices to help ensure full compliance.
1. Business Registration and PAN/TAN Application
- Obtain PAN (Permanent Account Number): Essential for all tax filings.
- Get TAN (Tax Deduction and Collection Account Number): Required if your business deducts TDS on salaries or payments.
2. Income Tax Compliance
- Timely Filing of Income Tax Returns (ITR):
- Sole Proprietorships/Partnerships (non-auditable): Due date is usually July 31st.
- Businesses requiring audits: Due date is October 31st.
- Advance Tax Payments: Ensure quarterly advance tax payments are made by June 15, September 15, December 15, and March 15.
- Documentation: Keep records of all income, expenses, and deductions for accurate reporting and to substantiate deductions if audited.
3. Goods and Services Tax (GST) Compliance
- GST Registration: Mandatory if your annual turnover exceeds ₹20-40 lakhs (depending on your state).
- Monthly/Quarterly Filing of Returns:
- GSTR-1: Details of outward supplies.
- GSTR-3B: Summary of sales, input tax credit, and tax liability.
- Annual Return (GSTR-9): Required if turnover exceeds ₹2 crores.
- Regular Reconciliation: Reconcile purchase and sales data to avoid mismatches with vendors.
4. Tax Deducted at Source (TDS) Compliance
- Deduction and Payment of TDS: Deduct TDS on specified expenses like salaries, rent, contractor payments, and deposit by the 7th of the following month.
- Quarterly TDS Returns: File quarterly TDS returns (Form 24Q/26Q) for the periods ending June, September, December, and March.
- Issue TDS Certificates: Provide TDS certificates (Form 16/16A) to payees as proof of deduction.
5. Professional Tax Compliance
- Registration and Payments: Register for professional tax and make timely payments if applicable in your state.
- Monthly/Annual Returns: File returns based on state requirements.
6. Provident Fund (PF) and Employee State Insurance (ESI)
- EPF Registration: Mandatory for businesses with 20+ employees.
- ESI Compliance: Register for ESI if your business has 10+ employees earning up to ₹21,000 monthly.
- Monthly Payments and Returns: File monthly returns and pay contributions by the 15th of the following month.
7. Maintenance of Books and Records
- Record-Keeping for Tax Audit: Maintain all financial statements, tax invoices, payroll records, purchase and sales data, etc., as required by the Income Tax Act.
- Digital Storage: Consider digitizing records to make audits and compliance smoother.
8. Regular Updates on Tax Amendments
- Stay Informed: Regularly monitor amendments in tax laws, GST rates, TDS rules, and deadlines as they can impact compliance.
9. Penalty Avoidance
- Avoid Delays in Filing: Timely filings help avoid penalties and interest.
- Rectify Mismatches Promptly: Resolve any discrepancies in returns or GST reconciliation to prevent further complications.
This checklist provides a roadmap for maintaining tax compliance, minimizing risks, and ensuring smooth operations. Let me know if you’d like more details on any specific section!
For more information on GST & other taxation related topics, visit bizconsulting.io.
