Closing the financial year is a major task for accountants and business owners in India. This step-by-step checklist ensures your books are accurate, balanced, and ready for tax audits and ROC filings for FY 2025-26.
Financial Year Closing Deadlines
In India, the financial year runs from 1st April to 31st March. Key deadlines follow the closing date, with tax audits usually due by 30th September and ITR filings by 31st July/31st October.
Step-by-Step Closing Checklist
1. Bank Reconciliation
Reconcile all bank statements, credit card accounts, and loan accounts with your accounting ledger. Ensure every transaction is accounted for and there are no duplicate entries.
2. Depreciation Calculation
Calculate and post depreciation on all fixed assets according to the Companies Act (for companies) and the Income Tax Act (for tax filing).
3. Inventory Valuation
Conduct a physical stock count on 31st March and value the inventory at cost or net realizable value, whichever is lower (in accordance with AS-2).
4. Accruals & Prepayments
Adjust your ledgers for accrued expenses (expenses incurred but not billed) and prepaid expenses (expenses paid in advance like insurance).
5. GST & TDS Reconciliation
- Verify that GST payable and input tax credit in books reconcile with GSTR-3B and GSTR-2B.
- Reconcile TDS deducted on sales (Form 26AS/AIS) with TDS receivable in books.
- Ensure TDS has been deducted and paid on all applicable expenses before 31st March.
6. Related Party Reconciliation
Confirm balances with related party companies, directors, and partners, and obtain balance confirmation letters.
Audit and Financial Statement Preparation
Prepare the Balance Sheet, Profit & Loss statement, and Cash Flow statement. Ensure the trial balance matches. Organize all ledgers, purchase vouchers, sales invoices, and bank statements for the statutory auditor.
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Disclaimer: Financial year-end accounting involves complex regulatory compliances. Consult a qualified accountant or CA for specific assistance.
Last Updated: July 2026
Author: Preet Kansangra, Tax & Compliance Expert
Reviewed by: Fingrade.in Team
