Title: The Year-End Handover File: What Your CA Actually Asks For

Updated for FY 2026-27 (AY 2027-28).

The year-end handover file: what your CA actually asks for, and how to build it in one afternoon

Every year it goes the same way. Your chartered accountant sends a list in April, you send a folder of bank PDFs and some invoices in July, and then spend three weeks answering questions like "what is this ₹1,87,400 transfer on 14 November". The work is not hard; it is scattered. This piece sets out exactly what goes into the handover file, in the order your CA will use it, and how to assemble it in a single afternoon.

Start with the bank, because everything else is checked against it

Your CA cannot certify a single number until the cash and bank balances are settled. So the first item is not your invoices — it is a complete set of bank statements for every account the business touched between 1 April 2026 and 31 March 2027.

Concretely, you need:

• Statements for each current account, savings account used for business, and credit card, covering the full twelve months with no gaps. Not "April to February because March had not closed yet".
• The closing balance on 31 March 2027 for each account, written down separately. Your CA will tie the books to this figure.
• A note on any account opened or closed during the year, with the date.

Then do the part most people skip: reconcile. Go line by line through the statement and make sure every credit and debit has a matching entry in your books. The unmatched ones are where the year's mistakes live — a customer payment never recorded, a bank charge of ₹590 that nobody booked, an EMI split between interest and principal that was posted entirely to expenses.

Three categories of transfer cause most of the back-and-forth, so label them in advance:

1. Owner money going in — capital introduced or a director's loan, not income.
2. Owner money coming out — drawings or salary, not an expense in a proprietorship.
3. Inter-account transfers — moving ₹5,00,000 from HDFC current to IDFC FIRST is not a sale and not a payment. Flag these or your turnover will be overstated.

If this sounds like a week's work, it usually means the reconciliation has been left for twelve months. Done monthly it takes twenty minutes. Our bank statement reconciliation guide covers the mechanics.

Receivables and payables: two lists, with ageing

Your CA needs to know what the business is owed and what it owes as at 31 March 2027. Two simple lists will do.

Debtors list: customer name, invoice number, invoice date, amount, amount still outstanding. Sort by invoice date so the old ones surface. An invoice from June 2026 still open in March 2027 is a conversation about whether it is a genuine receivable or a bad debt to be written off this year.

Creditors list: supplier name, bill number, bill date, amount, amount still unpaid. Include things that have no bill yet but relate to the year — the electricity for March billed in April, the accountant's own fee, the rent for March paid on 5 April.

This second category, accrued expenses, is where small businesses leak deductions. If you paid ₹45,000 for March rent on 4 April 2027 and never recorded a liability, that ₹45,000 sits in FY 2027-28 instead of the year it belongs to.

Being March 2027 rent accrued, paid 4 April 2027.

Reconcile GST before your CA finds the gap

The single most expensive year-end surprise is input tax credit that cannot be claimed because it never appeared in GSTR-2B. ITC is only available when it shows up there, so a supplier who did not file their GSTR-1 has, in practice, spent your money.

Build a small sheet with four columns, month by month:

• Output tax as per your books
• Output tax as per GSTR-1 filed
• ITC as per your books
• ITC as per GSTR-2B

Where the first two differ, you have either an unreported invoice or a credit note that never made it into the return. Where the last two differ, chase the supplier now rather than in August. Also reconcile total turnover in your profit and loss account against total outward supplies in GSTR-1 for the year — if your books show ₹2,14,60,000 and the returns show ₹2,09,40,000, your CA will ask about that ₹5,20,000 gap, and the answer is usually an export invoice, a credit note, or a sale recorded twice.

Keep your filed GSTR-1 and GSTR-3B acknowledgements in the folder. Returns are due on the 11th and 20th of the following month respectively, or quarterly under QRMP if turnover is up to ₹5 crore.

TDS: both the tax you deducted and the tax deducted from you

Two separate piles here, and people tend to remember only one.

TDS you deducted. Pull a list of payments where deduction was required and confirm it was done at the right rate: contractors under 194C at 1% for individuals or 2% for companies, once a single payment crosses ₹30,000 or the yearly aggregate crosses ₹1,00,000; professional fees under 194J at 10% (technical services at 2%) above ₹50,000 a year; rent under 194I at 10% above ₹6,00,000 a year; commission under 194H at 2% above ₹20,000. Keep the challans and the 24Q/26Q acknowledgements for all four quarters.

TDS deducted from you. Download Form 26AS and the Annual Information Statement for AY 2027-28. Match every entry to an invoice in your books. A ₹2,00,000 credit in 26AS with no matching invoice means a sale you forgot to record; an invoice with no matching 26AS entry means a client who has not filed their return, and you need to chase them before you claim the credit.

A worked example: one afternoon's reconciliation, in rupees

Take Nikhil, a freelance design consultant in Pune, receipts for FY 2026-27 of ₹58,00,000, all through bank transfer. He files under section 44ADA, so presumptive income is 50% of receipts.

Presumed professional income: ₹29,00,000.

He has no salary, so there is no ₹75,000 standard deduction. Under the new regime, which is the default, tax on total income of ₹29,00,000 works out as:

Tax before cess: ₹4,50,000. Add health and education cess at 4%: ₹18,000. Total: ₹4,68,000.

Now the reconciliation that matters. His 26AS shows TDS of ₹5,80,000 deducted under 194J at 10% on ₹58,00,000 — but his books show receipts of ₹56,40,000, because one client's ₹1,60,000 invoice from March 2027 was paid in April and never recorded. The books are wrong, not 26AS. He records the missing invoice:

With TDS of ₹5,80,000 already credited against a liability of ₹4,68,000, Nikhil has a refund of ₹1,12,000 — which he would not have claimed correctly if the receipts in his books had not matched 26AS. Note also that under 44ADA the whole advance tax is due by 15 March in a single instalment, not four.

The fixed assets and loans page

Two short schedules close the file.

Fixed assets: for anything bought during the year — a laptop at ₹1,35,000, an air conditioner at ₹48,000, office furniture at ₹92,000 — give the invoice, the date of purchase, and the date it was first put to use. The date of use matters, because an asset used for under 180 days gets half the depreciation rate. Also list anything sold or scrapped, with the amount received.

Loans: for each loan, the lender, the opening balance on 1 April 2026, the amounts drawn and repaid, the closing balance on 31 March 2027, and the interest certificate. The certificate splits each EMI into principal and interest — only the interest is an expense, and booking the full EMI to the profit and loss account is a classic error that inflates expenses and understates the liability.

Doing this in FlipAccounts

In FlipAccounts, upload the year's bank PDFs or CSVs under Banking and reconcile there; HDFC, IDFC FIRST and Aspire statements are read directly, and the categorisation rules learn from the matches you confirm, so the twelfth month takes far less time than the first. The GST section gives GSTR-1 and GSTR-3B summaries from the same invoice data, and there is a TDS summary alongside it for the deduction check. When the file is ready, run the statements pack — profit and loss, balance sheet, trial balance and general ledger — and export to Excel or Tally for your CA. If you would rather your CA work in the books directly, add them under multi-company roles, including a read-only auditor login, and the tamper-evident audit log records what was changed and when.

What to do this week

1. Download every bank statement for FY 2026-27 in one sitting and check the closing balances against your books, account by account.
2. Download Form 26AS and the AIS for AY 2027-28 and tick off each entry against an invoice in your records; chase anything that does not match.
3. Write the two lists — outstanding debtors and unpaid creditors as at 31 March 2027 — including bills that have not arrived yet but relate to the year.

Frequently asked questions

My CA asks for a trial balance. What is it and do I need to make one by hand?

A trial balance lists every ledger account with its closing debit or credit balance, and the two columns must be equal. Any double-entry system produces it automatically from the entries you have already recorded; you do not build it by hand. If your books are in a spreadsheet rather than a double-entry system, your CA will have to construct one, which is what the extra fee usually covers.

I file under 44ADA. Does my CA still need all this?

Yes, though the emphasis shifts. Under 44ADA your income is presumed at 50% of gross receipts, so the critical number is total receipts, which must reconcile to your bank credits and to Form 26AS. You also need to confirm that cash receipts are 5% or less of total receipts to be eligible for the enhanced ₹75 lakh presumptive threshold. Expense records matter less for the computation but still matter for GST and for proving the receipts figure.

What is the deadline I should be working backwards from?

For non-audit cases the income-tax return is due on 31 July. If your accounts need a tax audit — turnover above ₹1 crore, or above ₹10 crore where cash receipts and payments are each 5% or less — the timeline is earlier and tighter, so ask your CA for their date, not the statutory one. Giving a CA a clean file in April rather than a box of papers in July is the difference between a review and a reconstruction.

Should I pick the old regime or the new one?

It depends on how much you actually claim. The new regime is the default and has no 80C, 80D or HRA, but wider slabs and a rebate that makes tax nil up to ₹12,00,000 of total income. The old regime is worth modelling if you have a home-loan interest claim near ₹2,00,000 under section 24(b), a full ₹1,50,000 under 80C and meaningful HRA. Run both computations on your actual numbers rather than relying on a rule of thumb, and check with your CA before locking the choice, particularly if you have business income, where switching back is restricted.

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