Every country follows a financial year or fiscal year, to track its money, taxes, and business accounts. The financial year is a fixed 12-month period used by governments, companies, and individuals for budgeting, accounting, and tax filing.
It helps businesses understand how much they earned, spent, and saved during the year. Knowing the financial year dates is very important for taxpayers, investors, and business owners.
What is a Financial Year?
A financial year (FY) is not always the same as the calendar year (January to December). Instead, it can start and end on different dates depending on the country.
For example:
- In India, the financial year starts on April 1 and ends on March 31.
- In Australia, it runs from July 1 to June 30.
- In the United States, the federal government’s fiscal year is from October 1 to September 30.
This period is used for all financial activities such as tax payments, business audits, and government budgets.
Why Is the Financial Year Important?
The financial year is essential because it helps:
- Businesses manage money: They can prepare profit and loss statements.
- Governments collect taxes: It defines when taxes should be paid.
- Accountants plan reports: They can compare yearly financial performance.
- Investors analyze trends: They can check which companies are growing yearly.
Without a clear financial year, there would be confusion in calculating income and expenses.
Financial Year Dates Around the World
Different countries follow different financial year dates based on their history, tax systems, and business seasons.
Country Financial Year Starts Financial Year Ends in India April 1–March 31, Australia July 1–June 30, United Kingdom April 6–April 5, United States October 1–September 30, Canada April 1–March 31 Japan April 1–March 31, Pakistan July 1–June 30, New Zealand April 1–March 31, Singapore April 1–March 31
As we can see, not all countries follow the same financial calendar. Each government selects dates that best suit their economy and tax structure.
Financial Year vs. Assessment Year
People often confuse Financial Year (FY) and Assessment Year (AY)—especially during tax season. Let’s understand the difference:
- Financial Year (FY): The year in which you earn income.
Example: FY 2024–25 means you earned income between April 1, 2024, and March 31, 2025. - Assessment Year (AY): The year in which you file your taxes for the income earned in the previous financial year.
Example: AY 2025–26 is when you file your tax return for FY 2024–25.
So, FY is when you earn, and AY is when you report and pay taxes on that income.
How Businesses Use the Financial Year
For companies, the financial year plays a key role in all operations. Here’s how it helps:
- Budget Planning: Businesses create yearly budgets based on expected income and expenses.
- Tax Filings: Companies submit their tax returns for the financial year to the government.
- Auditing: Financial statements are audited to ensure all records are correct.
- Performance Review: Businesses compare data from previous years to check growth.
- Investor Reports: Public companies release annual reports for shareholders based on financial year data.
How to Remember Financial Year Dates
Here’s a simple trick to remember your financial year dates:
- Think of it as starting three months after the calendar year begins (in many countries).
- For example, April to March is common in India and many Asian countries.
- In countries like Australia and Pakistan, remember “July ”Jump”—the financial year jumps on July 1.
Making a note in your calendar every year helps you stay updated with filing deadlines.
Key Deadlines During a Financial Year
Some important activities take place during the financial year:
- April to July: Start of the new financial year and preparation of the previous year’s tax returns.
- September: Quarterly audits or payments in some countries.
- December: Mid-year reviews and forecasts.
- March: End of financial year; companies close their books and prepare reports.
Knowing these deadlines helps avoid penalties and ensures smooth tax filing.
Example of Financial Year 2024–25
Let’s take India’s FY 2024–25 as an example:
- Starts on April 1, 2024
- Ends on March 31, 2025
- Assessment Year: 2025–26 (Tax filing between April and July 2025)
So, any income earned during FY 2024–25 will be taxed in AY 2025–26.
🪙 Tips to Manage Your Financial Year Efficiently
Here are some simple tips for individuals and businesses:
- Keep records: Maintain invoices and bills properly.
- Track expenses: Use tools or apps to manage your money.
- Plan taxes early: Don’t wait until the last moment to file returns.
- Consult an accountant: For correct filing and saving on taxes.
- Review performance: Check how you did financially compared to last year.
FAQs
Q1. What is the difference between a calendar year and a financial year?
A calendar year runs from January 1 to December 31, while a financial year can start and end on other dates, like April 1 to March 31.
Q2. Why doesn’t every country follow the same financial year?
Because each country has different economic cycles, climate conditions, and tax systems, they choose dates that fit their needs.
Q3. When does the financial year 2024–25 start and end in India?
It starts on April 1, 2024, and ends on March 31, 2025.
Q4. Can companies choose their own financial year dates?
Some private companies may have permission to follow a different financial year, but most must follow the government’s standard.
Q5. How do I check my financial year for tax filing?
Look at your income period. If you earned money between April 2024 and March 2025, your financial year is 2024–25, and your assessment year is 2025–26.
Conclusion
Understanding financial year dates is essential for everyone—individuals, businesses, and governments. It helps in managing money, paying taxes on time, and tracking growth.
By knowing your country’s financial year, you can plan your income, investments, and taxes better. Whether you’re an employee, student, or business owner, staying aware of these dates ensures financial discipline and peace of mind.
