In India, the new fiscal year first begins on April 1. A long-standing system that is crucial for budgeting, taxation, and financial reporting, India's fiscal year runs from April to March. But why does tax year start in April? The agricultural cycle and the effects of British colonialism are the historical and technical causes behind this.
Why Does the Tax Year Start in April?
India’s tax year begins on April 1 and ends on March 31, a legacy shaped by historical, agricultural, and cultural factors.
This April–March cycle aligns with the traditional Indian crop calendar: sowing commences post‑monsoon in June–July, and harvest completes by March, allowing farmers and the government to effectively plan subsidies, procurement, and fiscal measures.
The British colonial administration formalized this timeline in 1867 to match imperial accounting practices, choosing April 1 due to the Gregorian shift from March 25 (Lady Day), ensuring continuity in financial reporting even after New Year’s Day moved.
Adopting a financial year that bridges the calendar year enables fiscal planning to align with agricultural seasons and cultural cycles.
It supports government budgeting tied to monsoon-based crop production, and preserves administrative consistency from colonial times.
For businesses and individuals, it creates predictability in tax filings, audit processes, budgetary planning, and seasonal adjustments.
I hope you found these reasons helpful.
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Why Does Tax Year Start in April?
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2025-06-19T16:10:07+00:00 2025-06-19T16:10:08+00:00Comment
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