Financial Year

What is a Financial Year?

A financial year (FY) is the 12-month period that the government and businesses use for financial reporting and accounting. In India, it runs from 1 April to 31 March of the following year.

The current financial year is FY 2026-27, which began on 1 April 2026 and ends on 31 March 2027.

Income earned during a financial year is subject to tax under the applicable tax rules. From 1 April 2026, the Income Tax Act 2025 uses the term “tax year” in place of the earlier distinction between the previous year and the assessment year. Income earned up to 31 March 2026 continues under the earlier framework.

Payroll teams also use the financial year to manage salary-related tax deductions (TDS) and complete year-end records.

Financial Year Dates in India

India’s financial year starts on 1 April and ends on 31 March of the following year.

Financial Year vs Calendar Year

A financial year in India runs from 1 April to 31 March, while a calendar year runs from 1 January to 31 December. Businesses use the applicable financial year for accounting and financial reporting, while the calendar year follows the standard January-to-December period.

Current Financial Year vs Last Financial Year

The “current financial year” or “this financial year” refers to the year in progress, which is FY 2026-27. The “last financial year” refers to FY 2025-26.

Frequently Asked Questions (FAQs)

1. What is the current financial year in India?

The current financial year in India is FY 2026-27. It runs from 1 April 2026 to 31 March 2027.

2. When does the financial year start in India?

India’s financial year starts on 1 April every year and ends on 31 March of the following year.