Tax should not be something you think about only when your accountant reminds you. As a business owner, you should have a basic understanding of your business’s tax position, what has already been filed and what may still be outstanding.

You do not necessarily need to prepare and file every tax return yourself. However, you should understand the numbers that affect your business and know what questions to ask before important tax deadlines.

1. Review your Income Tax Return

Your business’s Income Tax Return is prepared based on the financial performance of the previous year. That means you should understand how much your business earned, how much it spent, what the final profit was and how your tax liability was calculated.

Do not treat the Income Tax Return as just another document your accountant needs to submit. The return represents the financial and tax position of your business, so you should understand the main numbers before it is filed.

2. Make sure all business expenses are properly recorded

Missing expenses can change your reported profit and, as a result, can also affect your tax calculation. Review whether all genuine business expenses have been properly recorded.

• Office rent
• Employee salaries
• Marketing and advertising
• Travelling expenses
• Software subscriptions
• Professional fees
• Utilities
• Other business-related operating expenses

Recording the expense alone is not enough. Proper supporting bills, invoices, receipts, agreements and other relevant documents should also be maintained.

3. Check your TDS position

Depending on the nature of payments made by your business, Tax Deducted at Source (TDS) may need to be deducted on certain transactions.

This may include payments related to rent, salary, professional services, contractual services and other applicable transactions.

Before the deadline, review whether:

• TDS was deducted where required
• The correct amount was deducted
• Deducted TDS has been deposited
• Any TDS payment is still outstanding
• Related records and supporting documents are properly maintained

If TDS obligations are overlooked, they can create unnecessary tax and compliance issues later.

4. If you are VAT registered, review your VAT records

For VAT-registered businesses, sales, purchases, invoices, VAT returns and VAT payments should be reviewed carefully.

• Are your sales records complete?
• Are purchase records properly entered?
• Are VAT invoices properly maintained?
• Do sales and purchase figures reconcile with your accounting records?
• Have VAT returns been filed?
• Are VAT payments up to date?
• Is any previous VAT liability still outstanding?

VAT should not be reviewed only on the day the return needs to be filed. Regular review makes it easier to identify errors before they become bigger compliance problems.

5. Understand your tax position — do not leave everything to your accountant

Many founders simply tell their accountant, “Please handle all the tax filings.” Your accountant may prepare the calculation and complete the filing, but as the owner you should still understand what is happening financially inside your business.

Ask your accountant questions such as:

• What is our profit for the year?
• What is our taxable income?
• How much tax do we still need to pay?
• Have we already paid part of the tax?
• Is any TDS still payable?
• Is any VAT payment pending?
• Are there any other outstanding tax liabilities?
• Are there any compliance issues we should address?

Why business owners should understand tax

Tax is not only an accountant’s responsibility. It is directly connected with business decisions.

Your sales, expenses, salaries, investments, contracts, cash flow, pricing and business structure can all affect your tax position.

A founder who understands the basics of taxation can communicate better with accountants, review business numbers more confidently and make better-informed decisions.