From which month to which month we call the financial year?
Answers
Explanation:
know why the financial year is taken from April to March? Although the exact reason for why the Financial Year starts from April 1 and ends on March 31 is unknown, the financial researchers have put forth some the few main reasons:
1. Inheritance from British rule
India was under British control for around 150 years, who followed the accounting period of April to March. After the East India Company started to rule, they applied the same concept in India. Hence, financial year is from April to March in India also.
After Independence, the Indian Govt didn't change this pattern. Thus, in a similar manner, we celebrate the 'New Year EVE on the last day of the year as per the Western Culture.
2. Regional new year
April 1 coincided with the 'Hindu festival' of Vaisakha or the Hindu New Year. Hence, this may be the reason why the government also thought of starting the financial from April to March in India.
3. Agricultural country
India is an agricultural country and most of the sources of income depend primarily on crops. The income relies upon the estimation of the yields that are harvested in the period of February and March.
Thus, two months of span give government idea whether the revenue is going to increase/decrease. Hence it is one of the main reasons why the financial year is taken from April to March.
4. Festivals
The main festivals in India like Navratri and Diwali fall in the month of October and November, followed by Christmas in December. During these time periods, the value of sales for the retailers and value buying's for the shoppers are heavy, which makes accounting, compltime-consumingnsuming.