A high-level committee formed to study the feasibility of shifting financial year to January 1 from the current practice of starting from April 1 has submitted its report to Finance Minister Arun Jaitley. The government had in July set up a committee headed by former Chief Economic Adviser Shankar Acharya, to examine “desirability and feasibility” of having a new financial year.
“The Committee has submitted its report to Finance Minister. It has given the various merit and demerit of change of fiscal year and the report will be made public by the ministry in some time,” a source said.
The Committee, according to sources, have given reasoning for the change and its effect on the different agricultural crop periods and its impact on businesses, taxation systems and procedures, statistics and data collection.
Besides Acharya, the members of the committee are former Cabinet Secretary K M Chandrasekhar, Centre for Policy Research Senior Fellow Rajiv Kumar and former Finance Secretary Tamil Nadu P V Rajaraman.
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As a colonial legacy, India started following April-March period as financial year after getting Independence.
The Niti Aayog panel, headed by its member Bibek Debroy, has had also reportedly favoured following the calendar year as the financial year.
A change in financial year would require amendments in various statues and the change in tax laws during the transitional period.