Why does financial year in India start from 1 st April and not 1 st Jan Although the exact reason for why the Financial Year starts from 1 st April and not 1st Jan is unknown, the following are popularly expected to be the reasons for starting the year from 1st April:- 1. India was ruled by the Britishers for more than 150 years. And in the UK, the financial year starts from 1 st April and not 1st Jan. And therefore, the same concept may have been applied to India as well by the Britishers and after Independence; the Indian Govt didn’t change this. 2. In the many regional calenders like the Hindu calendar etc, the New Year starts in the month of April and this may be a reason why the govt also thought of starting the financial year in the month of April itself. Moreover, the crop season in India also starts in April and ends in March. 3. Another reason may be that the months of November and December are considered as Festival Season due to the presence of many festivals like Diwali, Christmas etc. The Inventory is very fast moving during this period and it would have been difficult to close the books of accounts during this period. Moreover, employees of many organisations are also on a vacation during this period and it gets difficult to close the books during this period. The above are reasons are just speculations for the reason why Financial Year starts from 1st April. There is no formal and confirmed reason for the same till date.
Posted on: Sat, 13 Jul 2013 08:20:48 +0000