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Desirability and Feasibility of Changing the Financial Year

Desirability and Feasibility of Changing the Financial Year
Start Date :
Aug 24, 2016
Last Date :
Oct 01, 2016
00:00 AM IST (GMT +5.30 Hrs)
Submission Closed

The Government of India has appointed a Committee chaired by Dr. Shankar Acharya, former chief economic adviser, to examine the desirability and feasibility of having a ‘new ...

The Government of India has appointed a Committee chaired by Dr. Shankar Acharya, former chief economic adviser, to examine the desirability and feasibility of having a ‘new financial year’. Other distinguished members of the Committee are Shri K M Chandrasekhar, former Cabinet Secretary, Shri PV Rajaraman, former Principal Finance Secretary, Tamil Nadu and Dr. Rajiv Kumar, Senior Fellow Centre for Policy Research.

Presently, the financial year followed by governments in India runs from 1st April to the following 31st March.

This issue was last examined by the L K Jha Committee in 1985, whose recommendation to move to a financial year of January 1- December 31 (for Central and State Governments) was then not accepted by the then Government.

There are many arguments for and against the change in financial year which revolve around issues of budget and cash management by government, seasonality of government revenues and expenditure, impact of Monsoon on budget forecasting, working season, timelines involved in the legislative cycle of passage of Budget by the Parliament, international comparability of fiscal statistics, aligning government’s financial year with year for tax assessment and corporate accounting purposes. Some arguments are less on the intrinsic merit or demerit of the change but rather on the timing of the change when the change coincides with other developments impacting businesses.

This Discussion Forum seeks to invite inputs from everyone interested in this issue.

We welcome your comments, suggestions, information and documents on the Committee’s Terms of Reference and issues related to it. Please provide these latest by 30th September, 2016.

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Showing 816 Submission(s)
Bhaskar M_1
Bhaskar M 8 years 2 months ago

My Name is Bhaskar. Really its a good idea to change the financial year from April - March to January - December as all other activities like counting of leaves and declaring DA two times every year, i.e. in January and July are taking place in the same period of January - December. Moreover, it would be better if we study the pattern of other developed countries, their merits & demerits. Based on them, we can go for January - December financial year.

Indra basu
Indra basu 8 years 2 months ago

My name is Indra Kumar Basu and a sr citizen, My PAN is AAEPB0455G & aadhaar no. is 493708152205. Presently retired from professional life. My total earning is diminishing due to lower interest rates. Prices of everything is going up. Example last year mediclaim was Rs. 27769 & this year Rs 31764/-. I am not interested about WPI. It should be based on retail price.
Allow the sr. citizen to invest in tax free bonds or Rs. 10,00,000/- should be standard deduction for IT payments. Best Regards.

Swaraj Chhallani
Swaraj Chhallani 8 years 2 months ago

Yes. It will surely help in simplifying things.
Benefits:-
1. Easy to compare financial statements from different countries.
2. Companies having set up in other countries need not have multiple deadlines and reporting dates.
3. Will bring consistency in financial reporting.
4. Credit of taxes paid in other countries will be aligned with our financial year.
5. Will encourage companies to adopt IFRS or Ind AS as the case may be.

Ajay Aggarwal_1
Ajay Aggarwal_1 8 years 2 months ago

PM Sir,
We have to shed the legacy of British Era and do what is convenient for us. If most of the world follows Jan-Dec as Calendar and Financial year - we can also follow the same. Also it will be slightly closer to our ancient system of New Year starting after Diwali. My only concern is that we are very active in Q2 - before Diwali, Q3- Diwali and Christmas and Q4- Year end. In the new system, we will be active in Q3 and Q4 mainly with no triggers in Q1 and Q2 - i.e. Jan -Jun.

K S V Padmanabhan
K S V Padmanabhan 8 years 2 months ago

Humbly suggest that it can be shifted to Jan to Dec. Why? When we deal with remitting taxes in 2 countries like India and USA, while applying DTAA (Double Taxation Avoidance Agreement), USA follows an accounting year of Jan - Dec. It will help. Regards.

sto.sto3532@gmail.com
PRAMOD SINGH 8 years 2 months ago

finaacil year start from 1april is not useful.summer vacation and hot temp.and there after raining seasion is not good for start of work. Actul work start from sept. and oct.FINANCIALYEAR MUST START FROM 15 JANUARY.

prem62pandya@yahoo.co.in
PRAMOD PANDYA 8 years 2 months ago

The utility and purpose of April-March fin year is still not known. Jan-Dec will be best as it will coincide with a normal/logical year. The academic year of schools and colleges should also be such. Govt. Budget be presented in Dec. and start the year afresh in Jan. with new rabi crops in Feb.