Under normal circumstances, today, the 31st March would have been such a busy day. It is after all the last day of the fourth quarter of FY20, the last day of the FY20 fiscal. It is the day when all accounts are closed for the fiscal and more importantly, the last day within which you get all your taxation offsets, the 80c investments done.
Ten days before 31st March, there are serpentine queues in banks for PPF, ELSS NPS and also at LIC branches, for getting in the premiums paid before today ends. But this time around, 31st March is just another day. Banks as such are closed or partially open for only urgent banking needs and currently, taxation, despite being 31st March is not urgent.
Today, the fiscal ends on the books, for us and for companies but we have time till 30th June 2020 to file the IT returns. Companies have also been given the leeway till 30th June to announce Q4 and FY20 earnings. So we have a 15-month FY20 in that sense though the fiscal actually ends as usual with 12 months. And that explains why the CAs and auditors, who under normal circumstances are not even available on the phone during this time are today cooling their heels. Unka time aayega……
Now that we are not exactly scrambling to beat a deadline today, ever wondered why we have 31st March as the fiscal year ending? Why this very confusing, not even mid-year kind of year end and beginning?
This fiscal year ending actually is a legacy left behind by the British. They followed the accounting period of April to March after they decided to adopt the Gregorian calendar system of accounting. It was the East India Company which first brought in this fiscal and once the British established their rule in India, naturally, all companies started following the same. Other “British colonies” which follow the same accounting year ending are South Africa, Hong Kong, Jamaica, Burma, Singapore and Canada also follow the same. There are some 33 countries around the world, which follow the same April to March fiscal.
The reason is the farm sector. If one carefully looks at all our festivals, which were celebrated much before the arrival of fiscal and British, they are all based on harvest season. It is only when the farmer has money that there are celebrations. There are no festivals during the sowing and toiling period as they seldom have time to celebrate and little money. That could also probably be one of the reasons why, the same fiscal is followed as the quarters track the agrarian cycle very well.
There is another explanation – 1st April is the day when Hindi festival of Vaishakh, a Hindu new year is celebrated. You typically have the Punjabi new year, Baisakh and Tamil New Year, Vishu ; Assamese Rongali Bihu; Mahabishuba Sankranti of Odisha; Poila Baishakh in Bengal. Majority though celebrate a new year in Chaitra, which comes in March. The bottomine though is that be it March or April, most Hindu calendars follow around the same year ending; which is why the fiscal year ending fits in so well.
Well, you might not be able to truly celebrate any of these festivals with gusto in April this year but the new year does bring in hope that the current crisis will soon abate and we will get back to the same routine which we detested earlier but we miss so sorely now. Learning so many life lessons indeed…