A S BANKA ADVISORS

March 31 is the most consequential date on every Indian startup’s compliance calendar. Miss a deadline, and you’re looking at penalties, interest, and questions from investors during due diligence.

This checklist covers the 10 most critical items every startup founder should verify before March 31, 2026. Most of these are not glamorous. They are the plumbing that keeps your company investable.

1. Advance Tax: Fourth Instalment (Due March 15, Verify by March 31)

If your company’s tax liability exceeds Rs 10,000 for the year, advance tax is mandatory. The fourth and final instalment was due March 15.

Action: Verify that 100% of estimated tax liability has been paid. If you underpaid, interest under Section 234B (non-payment) and 234C (deferral) starts accruing immediately. The interest rate is 1% per month, calculated from April 1.

Common startup mistake: Startups with lumpy revenue (one big contract in Q4) often miss the advance tax calculation. If your Q4 revenue was higher than projected, recalculate now.

2. TDS/TCS Returns: Q3 Filing (Due January 31, Verify by March 31)

Your Q3 TDS return (October-December 2025) was due by January 31. If it was not filed, late filing fees under Section 234E (Rs 200/day) are accumulating.

Action: Confirm Q3 return is filed. If not, file it immediately. The fee caps at the TDS amount, but the longer you wait, the more you pay.

Also prepare for Q4 (January-March 2026) TDS return, due May 31.

3. GST Reconciliation: GSTR-2B vs Books

March 31 is the last date to claim Input Tax Credit (ITC) for FY 2024-25 invoices in your GSTR-3B for March 2026. After this, unclaimed ITC from the previous year is permanently lost.

Action: Run a GSTR-2B reconciliation against your purchase register. Identify any invoices where your supplier filed their GSTR-1 but you haven’t claimed the ITC. This is typically 2-5% of total ITC for startups with multiple vendors.

4. MCA Director KYC (Form DIR-3 KYC): Due September 30, but Verify Now

Every director with a DIN must file DIR-3 KYC annually by September 30. If any of your directors missed it, their DIN is deactivated. A deactivated DIN means the director cannot sign any MCA filings, including annual returns.

Action: Check the DIN status of all directors at mca.gov.in. If any DIN shows “Deactivated,” file DIR-3 KYC immediately (late fee: Rs 5,000).

5. Board Meetings: Minimum Quarterly Requirement

Under Section 173 of the Companies Act, your board must meet at least 4 times per year, with no more than 120 days between consecutive meetings.

Action: Verify you held a board meeting in Q4 (January-March). If not, schedule one before March 31. Missing this triggers a penalty of Rs 25,000 per officer in default.

6. ESOP Valuation: Annual Fair Market Value Assessment

If your startup has an active ESOP scheme, the exercise price for any new grants should be based on a current valuation report from a registered valuer. Many startups use a valuation report from 12-18 months ago.

Action: If your last registered valuer report is older than 12 months, commission a fresh one. A current valuation supports defensible ESOP pricing and is required for proper governance during due diligence.

7. Statutory Audit Preparation: Close Your Books

Your statutory auditor will need completed books for FY 2025-26. March 31 is not just a filing deadline; it’s the cut-off date for your financial year.

Action: Ensure all revenue recognition, expense accruals, depreciation entries, and provision calculations are complete. Common delays: unbilled revenue, pending vendor reconciliations, and unreconciled bank statements.

8. Related Party Transactions: Board Approval

Under Section 188, all related party transactions for FY 2025-26 must have prior board approval. If your startup paid rent to a director’s property, hired a founder’s spouse as a consultant, or loaned money to a group company, these need documentation.

Action: List all related party transactions for the year. Verify each has a board resolution. If any are missing, pass a ratification resolution before March 31.

9. FEMA Compliance: ODI/FDI Annual Reporting

If your startup has received FDI (foreign investment) or made ODI (overseas direct investment), several annual filings are tied to the financial year end.

Action: For FDI: Verify Form FC-GPR was filed for every allotment within 30 days. For ODI: Verify Form ODI Part II (Annual Performance Report) is due by December 31 (already past, file immediately if missed). FLA Return is due July 15 but start gathering data now.

10. Pending Share Allotments: File PAS-3

If your startup allotted shares at any point during FY 2025-26 (to investors, employees exercising ESOPs, or new shareholders), Form PAS-3 must be filed with ROC within 30 days of each allotment.

Action: Cross-check your cap table against PAS-3 filings. If any allotments are unfiled, file them now. Late filing is better than no filing, and this is the most common red flag during investor due diligence.

The 5-Day Sprint: What to Prioritize

If you’re reading this with days to spare, here’s the priority order:

1. Day 1: Verify advance tax payments and TDS return status
2. Day 2: Run GST reconciliation and claim pending ITC
3. Day 3: Check director DIN status and board meeting compliance
4. Day 4: Review ESOP valuations and related party transactions
5. Day 5: Close books, verify PAS-3 filings, prepare FEMA documentation

What to Do Next

If you’re a startup founder reading this and realizing you’ve missed items on this list, don’t panic. Most of these have cure mechanisms, and late compliance is always better than no compliance.

I run a quick Compliance Diagnostic Call where I review your current filing status, flag the highest-risk items, and give you a clear action plan.

Book your Compliance Review: Schedule a quick call here

Also check out our free interactive tools:

• Cap Table Health Check
• ESOP Calculator

CA Adityavikram Banka is the founder of A S Banka Advisors Private Limited, a cross-border structuring and startup finance advisory firm.

Disclaimer: This article is for educational purposes and does not constitute legal or tax advice. Consult a qualified professional for advice specific to your situation.