Fact check: Is the financial year 2020 extended by the Indian Government?

The ongoing coronavirus outbreak has evidently taken over the world and forced people to observe strict social distancing. But, the ongoing pandemic has also resulted in a large number of fake news emerging without any trustable sources. Fake messages on WhatsApp have been circulating and claiming things which haven't been officially announced. 

CLAIM:

India has changed its Financial year (FY-21) from 1 April, 2020 to 1, July, 2020

RATING: False

The Gazette notification dated 30 March 2020 issued by the Indian government claimed that the Central Government hereby made the following change on 8 January 2020 - 'the 1st day of April 2020 will be substituted with 1st day of July 2020'

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Is financial year extended?

The Finance Ministry has clarified that 'there is no extension of the financial year'. It explained that the notification issued on 30 March 2020 was with respect to an amendment to the Indian Stamp Act. The ministry added that it was in relation with the collection of Stamp Duty on Security Market Instruments transactions through Stock Exchanges authorised by Stock Exchanges Depositories. 

The ministry added that due to the prevailing coronavirus situation the date of implementation of the above-mentioned process has been pushed to 1 July 2020 to put in place an efficient mechanism for the same.

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ORIGIN:

The speculation on the change of the current financial year started after a request from certain industry leaders to the government to start FY2021 from July 1 instead of April 1. Reports state that certain industries feel a 15-month year would help financials look better compared to the previous year. This development occurred after RBI cut short its upcoming accounting year from July 31, 2020, to March 31, 2021, to match with the Centre's fiscal year.

On March 23, the Reserve Bank of India, whose accounting year spans from July to June, cut short its accounting year. With the decrease in FY 20-21, the RBI's accounting year will match with the Centre's fiscal year (April 2021 - March 2022). This aligning was recommended by the Bimal Jalan panel set up to review the economic capital framework of the central bank. The panel had recommended both accounting years should be in sync beginning 2020-21.

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