As January 2026 approaches, taxpayers, professionals, and businesses must be extra cautious about Income Tax and GST compliances. The first quarter of the calendar year plays a crucial role in determining tax planning, avoiding penalties, and ensuring smooth filings for the rest of the financial year.
This article provides a complete Income Tax and GST readiness guide for January 2026.
Income Tax Compliances to Watch Before January 2026
1. Advance Tax – Third Instalment Due
For individuals and businesses liable to advance tax, the third instalment (75%) is usually due by 15th December. By January, taxpayers should:
- Verify advance tax paid
- Calculate any shortfall
- Prepare for interest under Sections 234B & 234C, if applicable
2. TDS & TCS Compliance Review
January is the right time to:
- Reconcile Form 26Q / 24Q / 27Q
- Match challans with Form 26AS
- Correct mismatches using TRACES
- Ensure correct PAN details to avoid higher TDS rates under Section 206AB
3. Salary Proof Submission & Tax Planning
Salaried employees should:
- Submit investment proofs (80C, 80D, HRA, interest certificates)
- Decide between Old Tax Regime vs New Tax Regime
- Plan tax-saving investments before 31st March 2026
4. Capital Gains & High-Value Transactions
Taxpayers who have:
- Sold property
- Traded in shares, crypto, or mutual funds
- Received large cash or bank transfers
Should review transactions to ensure correct reporting in upcoming ITRs.
GST Compliances to Prepare for January 2026
1. GSTR-1 & GSTR-3B Filing Discipline
Ensure:
- Timely filing of GSTR-1 (outward supplies)
- Accurate filing of GSTR-3B
- Matching of ITC with GSTR-2B
Late filing may lead to:
- Late fees
- Interest
- Blocking of e-way bills
2. Input Tax Credit (ITC) Reconciliation
Before January:
- Reconcile purchase register with GSTR-2B
- Follow up with vendors for missing invoices
- Reverse ineligible ITC to avoid future notices
3. GST Annual Return Preparation (FY 2024-25)
Though annual returns are due later, January is ideal for:
- Data cleaning
- Identifying mismatches
- Preparing for GSTR-9 & 9C, if applicable
Early preparation reduces stress and penalties.
4. E-Invoicing & E-Way Bill Compliance
Businesses crossing the notified turnover limit must:
- Ensure e-invoicing compliance
- Avoid invalid invoices
- Maintain proper documentation to prevent GST audits
Common Mistakes to Avoid in January 2026
- Ignoring advance tax interest
- Claiming ITC without 2B reflection
- Delayed TDS returns
- Wrong tax regime selection
- Incomplete documentation for deductions
Final Thoughts
January 2026 is not just another month—it is a strategic checkpoint for Income Tax and GST compliance. Timely review, reconciliation, and planning can:
- Reduce tax burden
- Prevent notices
- Ensure smooth year-end compliance
Taxpayers and businesses are strongly advised to consult professionals and keep their records clean and updated.
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