As the government is planning to shift the financial year from April-March to the calendar year January-December, 84% of Indians favour the move, a survey done by Deloitte showed. “84% of the respondents are keen on aligning the tax year (April-March) with the calendar year (January-December),” Deloitte in a report said. The government, in May last year, was reported to have initiated the spadework for shifting the financial year to January, from April, to align it with the agriculture production cycle.
Prime Minister Narendra Modi had backed the idea of the January-December financial year while addressing chief ministers at the Governing Council of NITI Aayog in April last year. Preliminary work has started and it will gather momentum as the year progresses, PTI quoting sources had reported. The GST implementation from July 1 was also an indication in that direction, that it is being implemented beginning the second half of the calendar year, PTI reported.
A Parliamentary panel, too, advocated the idea saying that the decades-old tradition of April-March fiscal introduced by the British should be ended. The present system was adopted by the Government of India in 1867 principally to align the Indian financial year with that of the British government. Prior to 1867, the financial year in India used to commence on May 1 and end on April 30 of the following year.
The government in 2015 appointed a high-level committee to study the feasibility of shifting financial year to January 1 from the current practice of starting the fiscal from April 1. The panel submitted its report to the Finance Minister in December, reasoning for the change and its effect on the different agricultural crop periods and its impact on businesses, the taxation system and procedures, statistics and data collection.
The government last year advanced the presentation of the Budget from the last day of February to the first day of February to give more time to departments to spend the money allocated to them. The survey captures the views of 697 mid-level managers and attempts to gauge the mood of the taxpayers ahead of the Budget 2018.