The Income Tax (IT) department is expected to propose ending the fiscal year concurrently with the calendar year to simplify tax filing across the country, reports Business Standard (BS).
As part of its proposals to the Treasury Department on the interim budget due to be presented in July, IT is expected to support a resolution that will bring the fiscal year forward by three months.
The fiscal year currently runs from April 1 to March 31 and the calendar year from January 1 to December 31.
“If the Bharatiya Janata Party (BJP) is re-elected on May 23, it can change the fiscal year (April-March) to the calendar year (January-December). However, it can face operational challenges and should be given adequate time before the system is changed, ”a source told BS.
“If it were introduced it would end 150 years of British practice. Similarly, the tax department is also trying to make the financial and tax year the same under the IT law, ”he added.
Approval from the highest level
In 2017, Prime Minister Narendra Modi vouched for the idea of bringing the financial year into line with the calendar year. This proposal was also approved by NITI Aayog.
The NDA government even set up a committee to review the feasibility of the proposal.
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