| A fiscal year is not necessarily based on a calendar year. <\/td> | Similarly, an assessment year is not necessarily based on a calendar year.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<\/span>What is the current financial year in India?<\/span><\/h2>\n\n\n\nThe current financial year (which is effectively the same as the current fiscal year) in India started on 1st April 2023 and will end on 31st March 2024. This is the 12-month time frame for which organisations (and individuals) will prepare financial statements reflecting their income through their business operations and other activities.<\/p>\n\n\n\n The corresponding assessment year for the current fiscal year will be from 1st April 2024 to 31st March 2025. This 12-month time frame will be used to file taxes for the current fiscal year.<\/p>\n\n\n\n <\/span>Why does the financial year in India start from 1st April and not 1st Jan?<\/span><\/h2>\n\n\n\nA question that is asked by many individuals is this \u2013 <\/strong>why financial year starts from April?<\/p>\n\n\n\nThe reason for adopting this time range comes from the time when India was a colony. The British Empire had adopted the Gregorian calendar, according to which the new year would start on the 1st of April. The same was imposed on India during colonisation, and the country persisted with it. <\/p>\n\n\n\n India continues to follow this 12-month time frame as it also has a strong connection with the Hindu calendar that celebrates the new year in the month of March \/ April. <\/p>\n\n\n\n <\/span>How does a fiscal year work?<\/span><\/h2>\n\n\n\nOrganisations use the fiscal year to analyse and report their performance. <\/p>\n\n\n\n They can choose any 12-month window depending on their operations and seasonality patterns. An organisation may also want to keep its fiscal year aligned with the assessment year for ease of reporting and filing income tax returns.<\/p>\n\n\n\n <\/span>Benefits of fiscal year (Adoption)<\/strong><\/span><\/h2>\n\n\n\n\n- A fiscal year helps the management and investors of an organisation to analyse its performance year on year. <\/li>\n\n\n\n
- It provides a specific timeline to monitor and review the revenues and expenses during that period. Analysts or business managers can easily compare this information to the future or past performance of the same organisation or competitors. <\/li>\n\n\n\n
- The Securities and Exchanges Board of India mandates every organisation to publish its financial statements. Following a fiscal\/financial year helps the organisation comply with SEBI’s requirements.<\/li>\n<\/ul>\n\n\n\n
<\/span>Conclusion<\/span><\/h2>\n\n\n\nTo report and analyse their earnings, organisations and individuals refer to different calendars and modes. These periods may depend on the country and many other factors. Individuals and companies need to understand the difference between assessment and fiscal years to properly account for their earnings and taxes.<\/p>\n\n\n\n <\/span>FAQs<\/span><\/h2>\n\n\n\n |