What is Financial Year (FY)?
Nexa Consultancy | Startup & Finance Glossary
A Financial Year (FY) is a 12-month period that companies and governments use for accounting and financial reporting purposes. Unlike a calendar year, a financial year can start on any date. In India, the financial year runs from April 1st to March 31st of the following year.
For Startups: All Indian startups must prepare their financial statements and file their tax returns based on the April-to-March financial year. This is a key difference from many other countries (like the US) that primarily use the calendar year. When discussing financials, it's important to specify which financial year is being referred to (e.g., "FY 2023-24").
Example: The period from April 1, 2023, to March 31, 2024, is referred to as FY 2023-24. The income earned during this period is assessed for tax in the Assessment Year (AY) 2024-25.