An Accounting Period is the specific time frame for which a business records and reports its financial activities. In the Indian context, this is usually a 12-month period starting from April 1st and ending on March 31st of the following year—commonly referred to as the financial year (FY). For instance, FY 2024–25 would cover all transactions between April 1, 2024, and March 31, 2025.
This period forms the foundation for preparing essential financial statements such as the profit and loss account, balance sheet, and cash flow statement. It helps businesses consistently evaluate performance, manage taxes, and meet various statutory and compliance requirements.
Under the Income Tax Act and Goods and Services Tax (GST) framework in India, businesses are required to maintain records and file returns based on this accounting period. It is also the standard timeline for audits, annual filings, and regulatory reporting for companies, LLPs, and registered firms.
Choosing and adhering to a fixed accounting period ensures accuracy, transparency, and comparability in financial reporting. Whether you're applying for business loans, attracting investors, or registering a business, clarity around your accounting period is crucial.
For more clarity on how your accounting period impacts compliance and filings, you may explore related concepts under the term Accounting Period in our glossary.