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31 MA
INTRODUCTION

As the Financial Year 2025–26 comes to an end, 31 March 2026 becomes a legally critical date for every taxpayer in India. Under the Income tax Act, 1961, the Central Goods and Services Tax Act, 2017, and other applicable laws such as the Companies Act, 2013, most deductions, exemptions, loss adjustments, and expense claims are strictly time bound. Any action not completed within the financial year generally cannot be corrected or claimed later, even at the time of filing the Income tax Return.
This guide explains everything a taxpayer needs to know and do before 31 March 2026, covering Income tax, TDS, GST, capital gains, MSME payments, and corrective provisions. All points are explained as per applicable statutory provisions, in a practical and easy to understand format.

Quick Snapshot of Key Legal Provisions to be complied with before 31 March 2026
Area
Provision
Why It Matters
Tax regime Section 115BAC Determines eligibility of deductions
Tax savings Sections 80C, 80CCD, 80D Core deductions
Home loan Section 24(b) Interest deduction
TDS credit Section 199, Rule 37BA Correct tax credit
Advance tax Sections 208, 234B, 234C Interest exposure
MSME payments Section 43B(h) Expense allowability
GST ITC Section 16, Rule 36(4) Valid ITC
Capital gains Sections 45, 70, 71 Loss set off
Updated return Section 139(8A) Past error correction



1. DECIDE THE CORRECT TAX REGIME BEFORE MAKING INVESTMENTS


Legal provision

• Section 115BAC of the Income tax Act, 1961

What every taxpayer should know

• Under the Income tax Act, 1961, the new tax regime is the default tax regime, which applies automatically unless the taxpayer opts otherwise

• The old tax regime permits taxpayers to reduce taxable income by claiming deductions and exemptions provided under the Act

• The new tax regime offers lower tax slab rates but restricts most deductions under Chapter VI A and exemptions, making it a simplified but deduction limited structure

Income Tax Slabs under New Tax Regime

Assessment Year 2025–26

Total Income
Tax Rate
Up to ₹3,00,000 Nil
₹3,00,001 – ₹7,00,000 5%
₹7,00,001 – ₹10,00,000 10%
₹10,00,001 – ₹12,00,000 15%
₹12,00,001 – ₹15,00,000 20%
Above ₹15,00,000 30%

Section 87A Rebate

• Tax rebate up to ₹25,000 for total income up to ₹7,00,000


Income Tax Slabs under New Tax Regime
Assessment Year 2026–27

Total Income
Tax Rate
Up to ₹4,00,000 Nil
₹4,00,001 – ₹8,00,000 5%
₹8,00,001 – ₹12,00,000 10%
₹12,00,001 – ₹16,00,000 15%
₹16,00,001 – ₹20,00,000 20%
₹20,00,001 – ₹24,00,000 25%
Above ₹24,00,000 30%
Section 87A Rebate
o Tax rebate up to ₹60,000 for total income up to ₹12,00,000

What to do before 31 March 2026
• Compare tax liability under both regimes
• Make tax saving investments only if opting for the old regime
• Inform employer about the selected regime if salaried

Why this matters
• Deductions claimed under an incorrect regime are legally disallowed


2. COMPLETE ELIGIBLE TAX SAVING INVESTMENTS AND PAYMENTS

Section 80C Deductions

Legal provision
• Section 80C(1) and Section 80C(2)

Eligible investments and payments
• Life insurance premium
• EPF and PPF contribution
• ELSS mutual funds
• NSC
• Principal repayment of housing loan
• Tuition fees for children subject to conditions


Action points
• Ensure actual payment before 31 March 2026
• Keep valid payment proof

National Pension System Contributions

Legal provisions
• Section 80CCD(1)
• Section 80CCD(1B)

Key benefit
• Additional deduction of Rs 50,000 over and above Section 80C

Action points
• Make voluntary NPS contribution before year end
• Health Insurance and Medical Expenses Section 80D

What qualifies
• Health insurance premium for self and family
• Health insurance premium for parents
• Preventive health check ups
• Medical expenses for senior citizens without insurance

Important condition
• Cash payment allowed only for preventive health check ups

3. HOME LOAN AND EDUCATION LOAN BENEFITS


Housing Loan Benefits

Legal provisions
• Section 24(b) for interest deduction
• Section 80C for principal repayment

Action points
• Ensure interest and principal are actually paid during FY 2025-26
• Obtain interest certificate from lender
• Education Loan Interest Section 80E

Key points
• Deduction allowed only for interest
• No maximum monetary limit
• Available for eight assessment years

4. DONATIONS AND OTHER ELIGIBLE DEDUCTIONS Section 80G

What taxpayers should check
• Donation is made to an approved institution
• Donation complies with prescribed cash limits

Action points
• Preserve donation receipts
• Verify eligibility before claiming deduction

5. VERIFY INCOME, TDS AND TAX CREDITS

Legal provisions
• Section 199
• Rule 37BA of Income tax Rules

What must be verified
• Form 26AS
• Annual Information Statement

Action points
• Match income reported with AIS
• Ensure TDS credits are correctly reflected
• Get mismatches corrected before filing return

6. PAY ADVANCE TAX AND AVOID INTEREST LIABILITY

Legal provisions
• Section 208
• Sections 234B and 234C

Who must pay
• Taxpayers whose tax liability exceeds Rs 10,000

Action points
• Pay full advance tax by 15 March 2026
• Pay self assessment tax for any shortfall

7. SALARIED TAXPAYERS FINAL YEAR END CHECKS Section 192

What to do
• Submit Form 12BB to employer
• Submit proofs of deductions and exemptions
• Verify salary breakup and tax computation

Why this matters
• Prevents excess TDS and refund delays

8. BUSINESS AND PROFESSIONAL COMPLIANCE BEFORE YEAR END

TDS Compliance

Legal provisions
• Sections 194C, 194J, 194H, 194Q
• Section 40(a)(ia)

Action points
• Deduct TDS wherever applicable
• Deposit TDS within prescribed timelines
• MSME Payments Compliance Section 43B(h)

Key requirement

  • Payment to MSMEs must be made within
  • 15 days where no agreement exists
  • 45 days where written agreement exists


Action points
• Clear MSME dues before 31 March 2026

9. GST COMPLIANCE BEFORE 31 MARCH 2026

Input Tax Credit Review

Legal provisions
• Section 16 of CGST Act

Action points
• Reconcile ITC with GSTR 2B
• Reverse ineligible ITC before year end

GST Returns and Reconciliation

Legal provisions
• Section 39
• Section 44 of CGST Act

Action points
• Ensure all GST returns are filed
• Reconcile GST data with books of accounts

10. CAPITAL GAINS AND LOSS PLANNING

Legal provisions
• Section 45
• Sections 70 and 71

Action points
• Book eligible capital losses before 31 March
• Plan exemptions under Sections 54 or 54EC where applicable

11. CORRECT PAST ERRORS USING UPDATED RETURN 9 Section 139(8A)

What taxpayers can do
• File Updated Return for past omissions
• Pay additional tax and regularise errors


CONCLUSION


31 March 2026 is a statutory deadline that determines what can and cannot be claimed under tax law. Any deduction, payment, or correction missed before this date is generally lost.Year end compliance is not only about reducing tax, but about ensuring accuracy, consistency, and legal validity of claims.
TaxoSmart helps taxpayers close the financial year with clarity, compliance, and confidence, ensuring that every decision is aligned with applicable law and ready for scrutiny.


DISCLAIMER


The information contained in this document is prepared by R.J. Soni & Associates and TaxOSmart LLP (hereinafter referred to as RJSA) for information purpose only. It does not constitute any legal advice or tax advice. In no way, this document should be treated as a marketing material or efforts to solicit a client. While we have made every attempt to ensure that the information contained in this document is true, RJSA, its partners and/or any of its employees make no claims / guarantee about its accuracy, completeness, or up-to-date character, or warranty, express or implied, including the warranty of opinions expressed for a articular purpose, or assume any liability or responsibility for the accuracy, completeness, or usefulness of any information available from this document.