Proposal for New Financial Year

We have had 150 year of financial year, which has been made by the British. Prime Minister Narendra Modi has given a new financial year from January to December instead of the current financial year that is from April to March, adopted in 1867.

Proposal for New Financial Year

What is in the Proposal?

  • It will create better cover for our farmers
  • The previous financial year timing did not allow India to account the impact of monsoon rains
  • The shift will keep the country in tune with the global practice as most big economies follow the January to December cycle.
  • Almost 156 nations follow this financial year
  • The top firms like World Bank and IMF uses the calendar year for data reporting
  • Foreign firms don՚t have to struggle with two types of financial years, here and at their parent country, which means better business for us.
  • It will allow the business firm to have fuller utilization of the resources of the working season
  • As there is a direct impact on data collection for natural accounts
  • It will take the weather into the account and there will be stability in calculating the crops and monsoons work
  • Apart from changing the Budget date, India will have to rework its tax assessment year, reorganize tax infrastructure, including at firm level and, probably even tweak the Parliament session timings.
  • There are few states which are not in favor of this, especially when they are trying to cope with the GST rollout and Plan and non-Plan expenditure merger.

What is Financial Year?

  • It is a period which is used by the government for accounting and budget purposes
  • It is also used by the business and other organization for financial reporting
  • There are many jurisdiction which require company financial reports to be prepared and published on a generally annual basis
  • The government՚s governments financial year runs from 1st April to 31st March
  • The current fiscal year was adopted by the colonial British government in 1867 to align India՚s financial year with that of the British Empire
Financial Year

Examrace Team at Aug 21, 2021