Keeping Your Business in Good Health During COVID-19: Part 1


With India in the midst of a second COVID-19 wave and rolling state and city lockdowns, your day-to-day as a business owner couldn’t have gotten any harder! Keeping your accounts in order and getting yourself ready to file taxes is probably not top-of-mind right now. Here’s why keeping on top of these things even in this extremely stressful environment can really benefit your business.

If you keep on top of your financials, you will know exactly how much money is going in and out of your accounts. You’ll know what bills are due when and which customer hasn’t paid you yet. Being aware of these things, especially now when everything is getting delayed or disrupted because of COVID, is critical to keeping your business on track.

Keeping on top of your cash flow also means you will be in a much better position to file your business income tax returns, GST Returns and TDS Returns on time, so that you don’t have to pay fines.

Paying all your tax dues on time and having renewed business documents is also very important when you need to apply for a business loan. It shows lenders that you run your business responsibly. This improves your creditworthiness and reduces the time it takes for your loan to be sanctioned and disbursed. Lenders also like to see you keep a calm head and keep things running smoothly even during a crisis.

In this time of extreme uncertainty, every small action you take to keep your business running in check counts a lot! So, let’s talk about what all you can do to avoid penalties and fines this year.


The first thing on our list is closing your book of accounts.

What is it?
  • Your book of accounts refers to the revenue, expense, and income summary reports that you prepare at the end of every financial year.
How to do it?
  • Closing your books is done in 3 phases:
    • First, enter all your business transactions into your accounting system. These will get added to your General Ledger, and will help produce your Balance Sheet and Income Statement.
    • Next, reconcile all entries in your financial statements with main financial statements like your bank statements to ensure the numbers match.
    • Finally, after reconciling all entries, lock your books. This means no changes can be made to your books for that year. Once you have paid your tax dues, you may reopen your books to adjust for these payments through “Adjustment Entries”.
  • You may want to do this every month if you have many monthly transactions, and you manage your business finances yourself.
Why is it important?
  • Closing your book of accounts is a necessary step in filing your tax returns.
  • It helps you assess whether your business made a profit or a loss in the previous financial year.
  • Your books will also help you identify opportunities to increase revenue and identify avoidable expenses to cut down.
  • This is something your CA should be doing, but it is important for you to understand the basics as well.


Next up, it’s time to file your Business Income Tax Returns.

Why is this important?
  • You need to file your Income Tax Returns to let the Income Tax Department (ITD) know how much you earned in the past year, from what revenue source, and how much you owe them.
  • Once you have paid the Income Tax you owe the government, you get an Acknowledgement Certificate from the ITD.
What is the consequence of not filing?
  • Banks require the Acknowledgement Certificate provided by the ITD to approve a loan, and if you do not have this, you become ineligible to get a loan.
  • If you haven’t paid your ITR dues from previous years yet, when you finally file your ITR for 2020-2021, you will be charged an interest amount for all the months you did not pay your taxes
When is the deadline to file?
  • The deadlines for FY 2020-2021 are 31 July 2021 for businesses that do not require audited financials, and 31 October 2021 for businesses where audited finances are needed.


Have you also filed your GST Returns?

What is it?
  • A GST Return is a document containing details of all income, sales and/or expense/purchase which a taxpayer (every GSTIN) is required to file with the GST authorities.
Why is this important?
  • Your GST Return is used by tax authorities to calculate net tax liability.
  • GST Returns for a specified duration are required by lenders when considering your business loan application. This duration is set by the lender.
What is the consequence of not filing?
  • If you don’t file any GST Returns, then subsequent returns cannot be filed.
  • Late filing of GST Returns will have a cascading effect leading to heavy fines and penalties ranging from a % penalty on the tax amount (minimum of Rs. 10,000) to a fine and jail time in extreme cases of tax evasion.
When is the deadline to file?
  • GST Returns must be filed on a rolling basis, either monthly or quarterly.
  • Visit the GST website to file them online.


And don’t forget about filing your TDS returns!

What is it?
  • Tax Deducted at Source (TDS) is tax collected in advance from an individual or organizations’ earnings before the money is credited to their account. This is controlled by the Central Board of Direct Taxes (CBDT) under the Income Tax Act, 1961.
  • A TDS Return is a quarterly statement submitted by you to the ITD showing a summary of the TDS collected by you and the TDS paid by you to the Income Tax Authority.
  • TDS return can be filed by you if you have a valid Tax Collection and Deduction Account Number (TAN).
Why is it important?
  • If you are deducting TDS, you need to file Forms 24Q, 26Q, 26QB or 26QC based on the purpose of your deduction each quarter and deposit the amount deducted with the CBDT.
  • Then, you need to file your TDS return with the Income Tax Department to make sure your employees Form 26AS are automatically credited with income tax credits.
What is the consequence of not filing?
  • Late payment of TDS– If you deduct TDS but forget to pay it to the income tax authority, you will be charged an interest of 1.5% per month on the TDS owed starting from the date when the TDS was deducted to the actual date of TDS deposit.
  • Late Filing of TDS Returns– According to Section 234E, you will be charged a late fee of Rs.200 per day until you file the returns. You have to pay this fine for every day of delay until the fine amount matches the actual TDS amount you are required to pay.
When is the deadline to file?
  • The deadline to e-file TDS Returns for the 4th Quarter of 2020-2021 is 31 May 2021. Filing your TDS online is easy and convenient.


Here is a useful calendar by the Income Tax Department to help you keep track of the due dates!


Final tip on our list – please follow all COVID-19 protocols

What this is?
  • Every state has set COVID-19 regulations on how many people can be in the store premises at once. These include both your employees and customers.
  • These rules are regularly updated depending on the COVID situation in your state/city.
Why is this important?
  • These protocols are the initial steps to your business returning to normalcy.
  • Following basic social-distancing and masking norms will help stop the spread of the virus and instil customer trust in you.
Consequences of not following the norms?
  • Every state has set its own regulation and penalties.
  • There are fines for not wearing masks and for failing to socially distance.
  • If a customer is caught not wearing a mask in your store, both you and the customer will be fined.


With cities going in and out of lockdowns, these are tough times, and you must do every little bit to ride out the pandemic. We understand that your business deserves the best. That is why at CreditEnable, we are committed to helping you access affordable business loans from India’s 20+ leading lenders in just 3-10 days! Our application process is 100% digital, meaning you do not need to leave the safety of your home to apply. We get to know your business and its needs and match you with the best business loan at the right terms and interest rate.

Having your registrations and business documents in order allows us and lenders to process your application faster, meaning you get your business loan sanctioned and disbursed in record time. Since you’re doing everything you can to stay healthy this year, it’s time to do the same for your business.

In Part 2 of the “Keeping Your Business in Good Health During COVID-19” series, we will talk about saving for a rainy day. Are you saving up for a future investment or to grow your business? We’ll tell you how to kickstart your savings!


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