Preparing the Workforce for the End of the Financial Yearadmin
The financial year is a standard one-year time period during which business is conducted. Organizations will have to submit balance sheets and income statements and other financial records to the government of India. The date with which the financial year starts differs from country to country. In India, the financial year or the fiscal year starts from April 1st and ends on March 31st of the next year.
In some organizations, handling year-end financials can become cumbersome for managers. To ease the burden, the process is outsourced to a third-party payroll to save time and effort. HR managers go through a lot of effort to ensure that compliance is met and that penalties are not incurred. To make life and the process of going through the end of the financial year a little easier, here are some tips for you to do at the end of the year.
- One of the ways managers can stay ahead is by reminding their employees about claiming reimbursements. Managers can remind employees to submit investment details, which will allow employees to claim refunds on those investments. They can also help employees with understanding which investments can give them a break on their taxes.
- Managers must always keep updating their payroll with their employee details. This will help in accurate record-keeping as well as help in financial planning and avoid any costly penalties incurred on payroll taxes due to incorrect record keeping.
- Managers can also save a lot of time by educating their employees on form 16. Form 16 is used by organizations to provide employees with details of taxes deducted. It can be used as a certificate for salary TDS. It is a staple in understanding an employee’s payroll taxes. The form 16 should contain details like PAN and other related documents. The organization or the manager can inform employees of what documents are required for submission of the form. The last date for the submission of the TDS form for March is April 30th of the following month.
- Payroll tax compliance can be maintained by ensuring that employees provide up to date records of transactions such as their HRA/ LTA and deductions from form 80C and so on. This will help the organization stay compliant and prevent any errors while handing payroll compliance.
- Another key aspect of payroll taxes is the salary slabs that employees fall under. Understanding the salary slabs will be of tremendous help to managers, which will help with their financial planning. Organizations can then communicate and keep employees informed when they are making crucial decisions. Post the 2020 budget, the salary slabs were revised, and new slabs were introduced. Making employees aware of their tax slabs and taxation rates will also ease the burden on managers.
- Investing in effective third-party payroll can also ease the burden on most managers. Employees may tend to make errors or mistakes on statements or even aspects such as leave and attendance. Learning how to make the best of the new software and making sure employees learn and implement it effectively is how managers can reduce stress during the end of a financial year.
- Some managers have taken to using financial statements as a management tool. By conducting a financial statement analysis on the workforce, managers can spot discrepancies and areas that need to be worked on in the next financial year.
The penalty for a late income tax return filing can vary between 5,000 INR and 1,0000 INR depending on income levels above or below INR 5,00,000. Managers must take all precautions before filing and preparing the workforce for the end of the financial year.