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Uniform Financial Year for all Companies
companies act has mandated for all the companies to follow an uniform financial
year for preparation of annual financial statements viz. balance sheet, profit
and loss account.
under companies act 2013
Section 2(41) defines
“financial year”, in relation to any company or body corporate, means the period
ending on the 31st day of March every year, and where it has been incorporated on
or after the 1st day of January of a year, the period ending on the 31st day of
March of the following year, in respect whereof financial statement of the
company or body corporate is made up:
On an application made by a company or body corporate, which is a
holding company or a subsidiary of a company incorporated outside India and is required
to follow a different financial year for consolidation of its accounts outside India,
the Tribunal may, if it is satisfied, allow any period as its financial year,
whether or not that period is a year:
Time period within which companies must align
its financial year
Provided further that a company or body corporate, existing on the
commencement of this Act, shall, within a period of two years from such
commencement, align its financial year as per the provisions of this clause;
provisions of section 2(41) was made effective from 1st April 2014
by MCA notification dated 26/3/2014.
Provisions in Companies act 1956
Section 2(17): "financial
year" means, in relation to any body corporate, the period in respect of
which any profit and loss account of the body corporate laid before it in
annual general meeting is made up, whether that period is a year or not:
relation to an insurance company, "financial year" shall mean the
calendar year referred to in subsection (1) of section 11 of the Insurance Act,
1938 (4 of 1938) ;
under Income Tax Act 1961
tax act, financial year is generally known as assessment year or previous year.
Section 2(9) of the said act defines "assessment
year" means the period of twelve months commencing on the 1st day of April
every year; and as per Section 3 of the said act “previous year"
means the financial year immediately preceding the assessment year.