The change in the fiscal year from January to December, as suggested by Prime Minister Narendra Modi,
will be beneficial for the common man, feel experts. Prime Minister
Narendra Modi on Sunday, while addressing the Niti Aayog meet, had
pitched the idea of migrating to fiscal year January to December period
from April-March period. The suggestion by PM has come after keeping in
view the farmers of the country.
Since India has been primarily an agriculture-based economy, the
revenue cycle in the agriculture sector is typically April to March. The
April-March cycle, as per experts, was mainly to match the agriculture
revenue cycle and ease out financial transactions. Experts see the move
to shift financial year to January –December in sync with the calendar
year and aligning with other developed countries, who also work in the
What does this move mean for the common man? In simple terms, this
would mean the financial year for an individual will start from January
1st and end on Dec 31st. The change to January-December financial year
would mean an individual has to pay taxes by the end of the same year.
Moreover, there will be a change in the ITR filing, which may change to
March 31st instead of July 31st, which is presently the last day for
On the other hand, shifting to January to December period will remove
the confusion surrounding the financial year and quarters. It will be
easier for anyone to remember the financial transaction timings.
Elaborating why the move will be beneficial for the common man, Manoj
Sharma- Co- Founder and Principal Officer, Policybazaar.com, said,
“There will not be much difference to a common man, rather it will be
beneficial for them. Further, only the taxation period will get a change
from the current April to March cycle to a new 12-month period (i.e.
January- December). At present, the common man is usually confused about
the financial year and transactions around it. It will be easy for them
to sync their expenses. However, this can be more beneficial if the
education system is also streamlined and is in sync with this change.
Currently, the format for schools and colleges is April to March.”
However, some experts feel that whether the move will be beneficial
for a common man or not depends on various factors and it can only be
guaged after the exact details. Chetan Chandak, Head of Tax research,
H&R Block India said,” The change to January-December financial year
means that all the income and expenses will be accounted over calendar
year and the taxpayers will be required to file the tax returns for
calendar year. But whenever the government first decides to switch to
new regime it would mean that the first financial year under the new
regime will be either shorter or longer than 12 months.”