March 31, 2026 deadline for key Income Tax and GST compliances: Time to take action now to prevent penalties and late fees

March 31, 2026 is the deadline for many procedures and forms in both income tax and goods and services tax (GST). Some of the procedures and forms have to be filed by March 31, 2026 else you lose the opportunity to get its benefits later on during the year and may even have to incur late fees, penalties and additional tax.

Chartered Accountant Suresh Surana explains the list of some of procedures and forms to be filed or done by March 31, 2026 for Income Tax purposes:

• Application for Lower / Nil TDS Certificate (Form 13): It is pertinent to note that while not a statutory March-end deadline, applying before the commencement of the new financial year is a prudent planning step to enable deductors to apply the appropriate withholding rate from April onwards.
• File ITR-U if applicable: File ITR-U if you have missed to report any income or missed filing any ITR, or applied the wrong rate of tax. Though you need to pay additional tax, penalty, etc for filing ITR-U, but not filing it means you are exposing yourself to scrutiny by the tax department and there you could be imposed with a bigger penalty.
• File TDS return for Q3 of 2025: The deadline to file TDS return for Q3 of 2025 is extended to March 31, 2026.
• Capital gains planning and loss set-off optimisation : Taxpayers should evaluate potential sale or retention of capital assets, utilisation of carried-forward losses, and eligibility for exemption provisions within prescribed timelines.
• Depreciation planning and put-to-use condition : Capital assets intended to be depreciated in the current year must be installed and put to use before 31 March to claim depreciation benefits (including additional depreciation, where applicable).
• Business Income and Expense Cut-off Review : Proper recognition of income and allowability of expenses should be assessed to ensure accurate computation of taxable profits.
• Withholding Tax Exposure Review : A comprehensive review of TDS applicability on payments made during the year should be undertaken to identify potential short-deduction or non-deduction risks.

Also read: TDS certificate issuance deadline extended by Income Tax dept due to technical glitches on the e-filing ITR portal


RSM India explains a list of procedures and forms to be filed or done by March 31, 2026 for GST purposes:

• Reconciliation of Returns and Books: Businesses should undertake a comprehensive reconciliation of GST returns with financial records. This includes reconciliation of GSTR-1 with sales registers, GSTR-3B with books of accounts, and GSTR-2B with ITC registers. Examine treatment of advances, credit notes, debit notes, and adjustments. Any discrepancies identified should be investigated and corrected through amendments in GST returns of March 2026, resulting in appropriate disclosures.
• Input Tax Credit (ITC) Review and Optimization: A detailed review of ITC should be conducted to ensure eligibility, proper documentation, and compliance with conditions under the CGST Act. Blocked credits under Section 17(5) should be identified and reversed where incorrectly claimed. Additionally, ensure that ITC is availed within statutory timelines by review of purchase invoices received, purchase recorded in books and auto-populated GSTR 2B reports. Timely availment is crucial to avoid permanent loss of credit and to maintain compliance with regulatory requirements.
• LUT Filing – FY 2026-27: Businesses engaged in the export of goods or services or supplies to SEZ units/developers without payment of IGST should ensure timely filing of the Letter of Undertaking (LUT) for FY 2026-27 prior to undertaking such supplies in the new financial year. It is important to verify eligibility conditions, ensure continuity of LUT validity, and avoid disruption in zero-rated supplies. Any delay or lapse in LUT filing may result in the requirement to pay IGST on exports, thereby impacting working capital and compliance positions.
• Vendor Compliance and Follow-ups: Vendor compliance plays a critical role in ITC availability. Businesses should undertake a detailed review of vendor compliance to ensure that suppliers have accurately reported outward supplies in their GSTR-1 and discharged the corresponding tax liability in GSTR-3B. This includes validating whether such transactions are duly reflected in the recipient’s GSTR-2B to safeguard input tax credit eligibility. Any discrepancies, such as non-reporting, under-reporting, or delays in filing, should be promptly identified and followed up with vendors for corrective action.
• Review of Tax Positions and Litigation Exposure: Assess key tax positions adopted during the year, including classification, valuation, and applicability of exemptions. Identify potential areas of litigation and evaluate provisioning requirements. Judicial precedents and CBIC clarifications should be reviewed to support positions taken.
• E-invoicing and E-way Bill Compliance Review: Verify compliance with e-invoicing provisions by checking that all applicable invoices are generated with valid IRNs and are accurately reported on the Invoice Reporting Portal (IRP) in accordance with GST requirements. Businesses for whom e-invoicing provisions have not been applicable so far should reassess their aggregate turnover for FY 2025–26, in cases where the Rs 5 crore threshold has exceeded during the year. Crossing this threshold would trigger mandatory compliance with e-invoicing requirements effective 1 April 2026. Accordingly, such entities should undertake timely system readiness, process alignment, and stakeholder awareness to ensure seamless transition and avoid any disruption in invoicing and reporting.
• ISD Mechanism Review: For entities operating with multiple GST registrations, it is critical to evaluate the design, implementation, and ongoing effectiveness of the Input Service Distributor (ISD) mechanism. This includes reviewing whether common input services are being appropriately identified and routed through the ISD registration, and whether credits are distributed to the respective units in a timely and compliant manner. Further, businesses should ensure that the allocation of common input tax credit is carried out in accordance with the prescribed distribution ratios, typically based on turnover or other relevant parameters, as per GST provisions. Any gaps in ISD applicability or incorrect routing of credits may lead to ineligible availment or accumulation of credits at inappropriate locations.