FINANCIAL YEAR

[Section 2(41) of the Companies Act, 2013]

Applicability:

Every Company or Body Corporate 

Meaning:

The period in respect of which Financial Statements of the company or body corporate are prepared, beginning and ending up as follows –

SECTION 2(41)

DATE OF INCORPORATION

(DOI)

FINANCIAL YEAR PERIOD

‘First’ Financial Year

1st Jan to 31st Mar

DOI to 31st Mar of the following year
1st April to 31st Dec

DOI to 31st Mar

‘Subsequent’ Financial Years

NA

1st April to 31st Mar

Conclusion:

‘First’ Financial Year

DOI to 31st March of the following year
‘Subsequent’ Financial Years

1st April to 31st March

Financial Year provisions-section 2(41)-Companies Act, 2013

For Example:

Date of Incorporation (DOI)

First/Subsequent FY

Financial Year

1st Jan to 31st Mar e.g. 2nd Feb, 2021

‘First’ FY 2nd Feb, 2021 to 31st Mar, 2022
‘Subsequent’ FYs

1st April, 2022 to 31st Mar, 2023 and so on

1st April to 31st Dec e.g. 11th May, 2021

‘First’ FY 11th May, 2021 to 31st Mar, 2022
‘Subsequent’ FYs

1st April, 2022 to 31st Mar, 2023 and so on

Exceptional Case:

CONDITION

COMPLIANCE FINANCIAL YEAR
Company or Body Corporate is a Holding or a Subsidiary or an Associate Company OF a Company Incorporated Outside India

 AND

 is required to follow a different financial year for consolidation of its accounts outside India

Application to CG (Regional Director) in Form RD-1

Any period may be allowed as its financial year, whether or not that period is a year

 For Example:

Company Incorporated In India

Company Incorporated Outside India e.g. Canada

S Ltd.

H Ltd.
‘Subsidiary’ of H Ltd.

‘Holding Company’ of S Ltd.

Required to follow FY of H Ltd. as per the laws of Canada for consolidation of its accounts

FY is ‘March to Feb’

Here, S Ltd. can follow FY ‘Mar to Feb’ different from that prescribed under Indian Law i.e. ‘April to Mar’ if allowed by CG (RD) on an application made to it in e-Form RD-1.

Transition Period:

2 years transitional period from the commencement of Companies Act, 2013 in respect of a Company or Body Corporate existing on such commencement.

*****

(In case of any inconsistency or clarification/ suggestions, author can be contacted for further details at [email protected], M.No. +91 8076064476)

Disclaimer: The views and opinions expressed in this write up are those of the author. The legal information is not advice and should not be treated as such. The author expressly disclaims all or any liability to any person who has read this document, or otherwise, in respect of anything, and of consequences of anything done, or omitted to be done by any such person in reliance upon the contents of this document.

Author Bio

Qualification: CS
Company: Jyoti Pandey, Company Secretaries
Location: Daryaganj, Delhi, India
Member Since: 15 Sep 2021 | Total Posts: 2

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