Year-end closing checklist: from Diwali's new bahi to 31 March

For generations, many Indian traders closed their old bahi and opened a new one at Diwali. The new book was blessed, the first entry was written with care, and the year's accounts started clean. Today the tax year runs from 1 April to 31 March, but the spirit of the ritual is still the best way to run a business: close properly, carry forward only what is real, and start fresh.

Two calendars, one business

• The traditional year in many trading communities, especially in Gujarat, starts the day after Diwali. Chopda pujan marks the new books.
• The financial year for tax, GST and statutory accounts runs from 1 April to 31 March.

Many family businesses use both: a Diwali-to-Diwali internal view and an April-to-March set of accounts for tax. If you do this, make sure the April-to-March accounts are complete in their own right.

The closing checklist

Work through this in the last two weeks of March, or at whatever date you close.

1. Customers and suppliers

• Send each major customer and supplier a statement and ask them to confirm the balance.
• Investigate any difference: usually a payment one side has not recorded or a bill one side has not received.
• Decide which old balances are unrecoverable and write them off as bad debts.

The digital khata can share a full statement for any party in one tap.

2. Cash and bank

• Count cash in hand on the closing date and match it with the cash book.
• Reconcile every bank account with the bank statement, including cheques issued but not yet cleared.
• Record bank charges and interest that appear only on the statement.

3. Stock

• Do a physical count on the closing date.
• Value stock at cost or market value, whichever is lower, using the same method as last year.
• Separate damaged, expired and dead stock. Our stock register guide explains the process.

4. Expenses and income

• Record bills that relate to this year but have not been paid, such as March electricity.
• Separate expenses paid in advance for next year, such as an annual software subscription.
• Record depreciation on equipment.
• Separate the owner's personal expenses from business expenses.

5. GST and tax

• Match your sales register with GSTR-1 and your purchase register with GSTR-2B.
• Check that input tax credit claimed matches eligible invoices.
• Pay the final advance tax instalment by 15 March if you are liable.
• Note the upcoming deadlines for returns in our due-date calendar.

6. Carry forward

• Carry forward only verified balances: confirmed customer and supplier balances, counted cash, reconciled bank and counted stock.
• Keep the closed year's books, bills and backups safe. Tax law generally requires books to be preserved for several years.
• In a digital khata, download a backup labelled with the year before starting a new book.

Starting the new bahi

Whether it is Diwali or 1 April, the first page of a new book should contain:

1. Opening cash and bank balances.
2. Opening balance for each customer and supplier.
3. Opening stock value.
4. Any loans outstanding.

A clean opening is worth more than any software. Every error not fixed at closing is carried into next year and becomes harder to find.

Common questions

This guide is general information to help you understand the topic. It is not legal, tax or financial advice. Rules and rates change; confirm details for your situation with a qualified professional or the official government portal. Read our editorial policy.