67-620: The Fifteenth Finance Commission ( XV-FC or 15-FC ) is an Indian Finance Commission constituted in November 2017 and is to give recommendations for devolution of taxes and other fiscal matters for five fiscal years , commencing 2020-04-01. The commission's chairman is Nand Kishore Singh , a senior member of the Bharatiya Janata Party (BJP) since March 2014, with its full-time members being Ajay Narayan Jha , Ashok Lahiri and Anoop Singh . In addition,
134-508: A group of businesses must use nearly the same fiscal year (differences of up to three months are permitted in some jurisdictions, such as the US and Japan), with consolidating entries to adjust for transactions between units with different fiscal years, so the same resources will not be counted more than once or not at all. In Afghanistan , from 2011 to 2021, the fiscal year began on 1 Hamal (20th or 21 March). The fiscal year aligned with
201-443: A January–December financial year, becoming the first Indian state to do so. But later it dropped the idea due to Many financial & accounting error. In Indonesia , since 2001, the fiscal year is the calendar year, 1 January to 31 December. Until 2000, the fiscal year ran from 1 April to 31 March; fiscal year 2000 ran from 1 April to 31 December. In Iran , the fiscal year usually starts on 21st or 22 March (1st of Farvardin in
268-455: A distinct system to fund defence and internal security be operationalised. It was dissolved on 26 November 2023. The commission was to submit its Report on the basis of its Terms of Reference (ToR) by 30 October 2019 covering a period of five years commencing from 1 April 2020. In July 2019, The Union Cabinet chaired by Prime Minister Narendra Modi approved the extension of the term of Fifteenth Finance Commission up to 30 November 2019 to enable
335-606: A division of tax devolution into four pots would violate "the objective of offsetting revenue disabilities." The commission's chairperson, N. K. Singh, said in April 2019 that there should be mechanisms through which the Finance Commissions and the GST Council could coordinate to "ensure there are multiplier benefits of a higher growth trajectory". At its first interaction with members of parliament (MPs),
402-546: A fiscal year which ends during the summer to align the fiscal year with the academic year (and, in some cases involving public universities, with the state government's fiscal year) and also because the university is normally less busy during the summer months. In the Northern Hemisphere , that is July to the next June. In the Southern Hemisphere , that is the calendar year, January to December. In
469-612: A letter addressed to the president, resigned his office. The members of the commission shall provide full-time or part-time service to the commission, as the President specifies in his order. The members shall be paid salaries and allowances as per the provisions made by the Central Government . So far 15 Finance Commissions have been appointed which are as follows: Major Recommendations of 14th Finance Commission headed by Prof. Y V Reddy The Fifteenth Finance Commission
536-565: A letter to the commission's chairman, N. K. Singh —asked the commission to revisit the criterion of the target of a maximum 3% fiscal deficit under the Fiscal Responsibility and Budget Management Act, 2003 , calling it "iniquitous". Singh added, that the state was still waiting for special financial allocations promised to it under the Bihar Reorganisation Act, 2000 . The commission, on its visit to
603-462: A meeting of finance ministers of the ten states and union territories to discuss the commission's ToR. In response, Subhash Chandra Garg , Union Economic Affairs Secretary , said that the terms of reference were balanced and were "not one way or the other", adding that according to the second provision of the ToR, states with a good total fertility rate —especially, the ones which had reached
670-408: A provision for rewarding states which were successful in eliminating or reducing expenditure incurred on populist schemes. Singh added that the commission would need to reappraise the formula of devolution of revenue through the union's taxes, because of a provision in its ToR. Singh further said, in a lecture to Indian Institute of Management Ahmedabad students, that one of the commission's challenges
737-562: A similar fashion, many nonprofit performing arts organizations will have a fiscal year which ends during the summer, so that their performance season that begins in the fall and ends in the spring will be within one fiscal year. Some media/communication-based organizations use a broadcast calendar as the basis for their fiscal year. Fiscal years' names are often shortened based on the year in which they end ; for example, "fiscal year 2023-2024" and "FY24" are synonymous. The fiscal year for individuals and entities to report and pay income taxes
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#1732782567869804-511: A state nor as a union territory (UT), saying that the Delhi government deserved a ₹ 52,000 crore (equivalent to ₹ 700 billion or US$ 8.3 billion in 2023) grant from the union government if it qualified as a UT in the commission's eyes, else it deserved more devolution of union government's tax revenue as a state. Kejriwal added that the Government of Delhi would move to
871-400: A year ending 30 June on the following dates: Victoria changed in 1870, South Australia in 1874, Queensland in 1875, Western Australia in 1892, New South Wales in 1895 and Tasmania in 1904. The Commonwealth adopted the near-ubiquitous financial year standard since its inception in 1901. The reason given for the change was for convenience, as Parliament typically sits during May and June, while it
938-455: Is a Union of states, the Union also has to survive". The commission visited several states, and held meetings with senior political and non-political state government officials of different states; most states also generally submitted a memorandum to the commission outlining their needs and demands to the panel. It also met with representatives of the industry and bankers. Das acted as chairman of
1005-487: Is often known as the taxpayer's tax year or taxable year. Taxpayers in many jurisdictions may choose their tax year. Some federal countries, such as Canada and Switzerland, require the provincial or cantonal tax year to align with the federal year. In the United States, most states retained a 30 June fiscal year-end date when the federal government switched to 30 September in 1976. Nearly all jurisdictions require that
1072-455: Is time-consuming, as checks for data consistency across time and data sets become challenging. In November 2019, the Cabinet approved the 15th Finance Commission to submit first report for the first fiscal year viz. 2020-21 and to extend the tenure of 15th Finance Commission to provide for the presentation of the final report covering FYs 2021–22 to 2025-26 by October 30, 2020. The statement by
1139-526: Is used in government accounting, which varies between countries, and for budget purposes. It is also used for financial reporting by businesses and other organizations. Laws in many jurisdictions require company financial reports to be prepared and published on an annual basis but generally with the reporting period not aligning with the calendar year (1 January to 31 December). Taxation laws generally require accounting records to be maintained and taxes calculated on an annual basis, which usually corresponds to
1206-784: The Central Industrial Security Force . In July 2019, the commission's term was extended by a month to November 2019, and its terms of reference (ToR) were expanded by the Union Cabinet and asked it to consider whether "adequate, secure and non-lapsable" funds could be provided for funding defence and internal security, and how would a distinct system to fund defence and internal security be operationalised. The commission constituted an advisory council "to advise it on matters related to its terms of reference". The council consisted of president of Forum for Strategic Initiatives and former Chief Economic Adviser to
1273-592: The Solar Hejri calendar ) and concludes on next year's 20th or 21 March (29th or 30th of Esfand in the Solar Hijri calendar ). In Ireland , the fiscal year is the calendar year, 1 January to 31 December. Until 2001, it was the year ending 5 April, as in the United Kingdom, but was changed with the introduction of the euro . The 2001 tax year was nine months, from April to December. In Israel ,
1340-528: The Supreme Court of India on the matter. AAP national executive and political affairs committee member and Delhi deputy chief minister and finance minister, Manish Sisodia said that the terms of reference of the commission were "unfair"; Sisodia was a part of the group of state and union territory finance ministers who met with the president. In addition, AAP national joint secretary, Akshay Marathe said—citing Central Board of Direct Taxes figures—that
1407-513: The chairman of Rajya Sabha —asked the commission's chairman, N. K. Singh, if certain states would be penalised with the use of 2011 census and was ensured by Singh that performing and progressive states would not be penalised by the commission. Aam Aadmi Party (AAP) convener and the chief minister of Delhi , Arvind Kejriwal , criticised the commission for treating the National Capital Territory of Delhi neither as
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#17327825678691474-434: The individual state governments . The First Commission was established in 1951 under The Finance Commission (Miscellaneous Provisions) Act, 1951. Fifteen Finance Commissions have been constituted since the promulgation of Indian Constitution in 1950. Individual commissions operate under the terms of reference which are different for every commission, and they define the terms of qualification, appointment and disqualification,
1541-471: The replacement rate (2.1 children per woman)—would be incentivised. Garg's views were reiterated by the nation's finance minister and Bharatiya Janata Party (BJP) Rajya Sabha leader, Arun Jaitley , who—in a Facebook post—said that the row over the commission's terms of reference was "needless" and could not have been "further from the truth". Prime minister and BJP Lok Sabha leader, Narendra Modi , said that vested interests were behind
1608-731: The Government of India , Arvind Virmani ; Oxus Research and Investments chairman and a part-time member of the Prime Minister's Economic Advisory Council , Surjit Bhattal; a former deputy director in the IMF, Sanjeev Gupta; a professor at the National Institute of Public Finance and Policy , Pinaki Chakraborty; JP Morgan chief India economist, Sajjid Chinoy; and a managing director and India economist and strategist at Credit Suisse , Neelkanth Mishra. Chief Economic Adviser to
1675-1206: The Government of India , Krishnamurthy Subramanian , was inducted as a member of the advisory council in May 2019. Further, the commission also constituted a high-level group to inter alia advise it on "ways and means to" make effective use of the "existing financial resources and to" encourage "the state governments' effort on" fulfilling "well-defined health parameters in India". The group comprised All India Institute of Medical Sciences, New Delhi director, Randeep Guleria as its convener and Narayana Health City chairman, Devi Shetty ; Maharashtra University of Health Sciences vice-chancellor, Deelip Govind Mhaisekar; chairman, managing director and chief cardiac surgeon of Medanta Health City , Naresh Trehan ; professor and head of department of cardiothoracic surgery at R. G. Kar Medical College and Hospital , Bhabatosh Biswas; and president of Public Health Foundation of India , K. Srinath Reddy as its members. Politicians—including chief ministers and finance ministers—; retired civil servants; judges; and economists from South Indian states opposed
1742-684: The National Capital Territory of Delhi contributed as much as ₹ 1.08 lakh crore (equivalent to ₹ 1.5 trillion or US$ 18 billion in 2023)—or 13 per cent—of the nation's direct tax revenue and got around ₹ 325 crore (equivalent to ₹ 456 crore or US$ 55 million in 2023) from the Government of India in return. Jammu and Kashmir finance minister, economist and Jammu and Kashmir Peoples Democratic Party member, Haseeb Drabu , said, in an editorial in Livemint commented that
1809-793: The Persian or Solar Hijri calendar used in Afghanistan at the time. Following transfer of power to the Taliban administration in September 2021, Afghanistan abandoned the Solar Hijri calendar in favour of the Lunar Hijri calendar . The fiscal cycle was restarted with effect from 1 Muharram 1444 AH (30 July 2022) In Australia , a fiscal year is commonly called a "financial year" (FY) and starts on 1 July and ends on
1876-577: The UK calendar despite being listed in India. Companies following Indian fiscal year get to know their economic health on 31 March of every Indian financial or fiscal year. The current fiscal year was adopted by the colonial British government in 1867 to align India's financial year with that of the British Empire. Prior to 1867, India followed a fiscal year that ran from 1 May to 30 April. On 4 May 2017, Madhya Pradesh announced that it would move to
1943-593: The allegations that the commission's terms of reference being biased against certain states and union territories and called such allegations "baseless". Finance ministers of the states of Karnataka , Kerala and Andhra Pradesh and the finance minister of the Union Territory of Puducherry met at a conclave in Kerala's capital, Thiruvananthapuram , in April 2018 and collectively denounced the commission's terms of reference, calling them to be in contradiction with
2010-471: The budget calendar by one month and passing of the full budget before commencement of the new financial year i.e. on 1 February, introduction of Goods and Services Tax (GST) from July 2017 and New FRBM architecture with debt and fiscal deficit path, and also the task of determining the expenditure and receipts of the Union and State governments based on which the Commission shall make its recommendations
2077-480: The central and state governments result from states incurring expenditures disproportionate to their sources of revenue , in the process of fulfilling their responsibilities. However, states are better able to gauge the needs and concerns of their inhabitants and therefore more efficient at addressing them. Horizontal imbalances among state governments result from differing historical backgrounds or resource endowments and can widen over time. Several provisions to bridge
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2144-658: The commission also has a part-time member in Ramesh Chand . The Fifteenth Finance Commission was constituted by the Government of India —after getting ceremonial approval from President of India —through a notification in The Gazette of India on 2017-11-27. Nand Kishore Singh was appointed as the commission's chairman, with its full-time members being Shaktikanta Das and Anoop Singh and its part-time members being Ramesh Chand and Ashok Lahiri . The commission held its first meeting on 2017-12-04. Lahiri
2211-651: The commission beyond 1 April 2021, will help both state and central governments design schemes with medium- to long-term financial perspective and provide adequate time for mid-course evaluation and correction. The first report, consisting of recommendations for the financial year 2020–21, was tabled in Parliament in February 2020. On 9 November 2020, the Fifteenth Finance Commission (XVFC) led by Chairman Sh N K Singh, submitted its report for
2278-634: The commission in state visits without Singh. The commission further met with the representatives of various federal government agencies, including the vice-chairman and chief executive officer of its quasi-autonomous policy think-tank , the NITI Aayog , Rajiv Kumar and Amitabh Kant respectively. The commission was headquartered in New Delhi at the Jawahar Vyapar Bhawan on Tolstoy Marg and its offices were provided security cover by
2345-633: The commission to examine various comparable estimates for financial projections in view of reforms and the new realities to finalise its recommendations for the period 2020–2025, after taking into consideration, its constitution in the backdrop of various major fiscal/budgetary reforms introduced by the Union Government in the past four years like closure of the Planning Commission and its replacement by NITl Aayog , removal of distinction between Non-Plan and Plan expenditure, advancing
2412-472: The commission to serve as the governor of the Reserve Bank of India . The commission was set up to give recommendations for five years commencing on 1 April 2020. The main tasks of the commission were to "strengthen cooperative federalism, improve the quality of public spending and help protect fiscal stability". Some newspapers like The Hindu and The Economic Times noted that commission's job
2479-494: The commission was asked by some MPs to recommend a plan on compensating states which suffered revenue losses after the roll-out of GST. Some parliamentarians also asked the commission to reassess the criteria of classifying a state as 'backwards'. The president of Nationalist Congress Party , Sharad Pawar , suggested the commission to create a financial buffer against oil prices. Whereas, the chief minister of Bihar and Janata Dal (United) president and convener, Nitish Kumar —in
2546-417: The commission's terms of reference , as, it used the data of 2011 census , instead of the data of 1971 census, as previous commissions had. South Indian states believes that this would dilute the share of South India in the pool of union's tax revenue, because of its progressive measure in population control vis-à-vis the north since 1971. Kerala finance minister, T. M. Thomas Issac , proposed
2613-553: The commission's ToR were outdated, and needed to be redrafted "to make the 15th Finance Commission a "second generation" commission". Finance Commission The Finance Commissions ( IAST : Vitta Āyoga ) are commissions periodically constituted by the President of India under Article 280 of the Indian Constitution to define the financial relations between the central government of India and
2680-419: The commission, and for their appointment, term, eligibility and powers. The chairman of a finance commission is selected from people with experience of public affairs. The other four members are selected from people who: A member may be disqualified if: Every member will be in office for the time period as specified in the order of the President, but is eligible for reappointment provided he has, by means of
2747-562: The commission. The commission was asked by several state governments to increase states' share in union's tax devolution from the existing 42 per cent to 50 per cent. Whereas, the Government of India asked the commission to review a 10 per cent hike from 32 per cent to 42 per cent in tax devolution given to states by the Fourteenth Finance Commission , with Union Minister of Finance , Arun Jaitley , saying that "India
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2814-531: The day that is closest to a particular date (for example, the Friday closest to 31 December). Under such a system, some fiscal years have 52 weeks and others 53 weeks. The calendar year is used as the fiscal year by about 65% of publicly traded companies in the United States and for most large corporations in the United Kingdom. That is the case in many countries around the world with a few exceptions such as Australia, New Zealand, and Japan. Many universities have
2881-408: The end of a week (e.g., 52 or 53 weeks in length, and therefore is not exactly one calendar year in length), or opt for its financial year to end on a date that matches the reporting cycle of its foreign parent. All entities within the one group must use the same financial year. For government accounting and budget purposes, pre- Federation colonies changed the financial year from the calendar year to
2948-500: The finance commission serves as an institutional framework to facilitate Centre-State Transfers. Article 280 of the Indian Constitution defines the scope of the commission: The Finance Commission (Miscellaneous Provisions) Act, 1951 was passed to give a structured format to the finance commission and to bring it to par with world standards, by laying down rules for the qualification and disqualification of members of
3015-517: The fiscal gap between the centre and the states were already enshrined in the Constitution of India , including Article 268, which facilitates the levy of duties by the centre but equips the States to collect and retain the same. Similarly, Articles 269, 270, 275, 282 and 293, among others, specify ways and means of sharing resources between the Union and States. In addition to the above provisions,
3082-556: The fiscal year is 1 July to 30 June. In France , the fiscal year is the calendar year, 1 January to 31 December, and has been since at least 1911. In Germany, the fiscal year runs from 1 January until 31 December. In Greece , the fiscal year is the calendar year, 1 January to 31 December. In Hong Kong , the government's financial year runs from 1 April to 31 March. However, a company incorporated in Hong Kong can determine its own financial year-end, which may be different from
3149-485: The fiscal year is the calendar year, 1 January to 31 December. In Italy , the fiscal year is the calendar year, 1 January to 31 December. It was changed in 1965, before which it was 1 July to 30 June. In Japan , the government's financial year is from 1 April to 31 March. Japan's income tax year is 1 January to 31 December, but corporate tax is charged according to the corporation's own annual period; most Japanese corporations elect their annual period to follow
3216-407: The fiscal year is the calendar year, 1 January to 31 December. In Bulgaria , the fiscal year is the calendar year, 1 January to 31 December, both for personal income tax and for corporate taxes. In Canada , the government's financial year is 1 April to 31 March. (Q1 1 April – 30 June, Q2 1 July – 30 Sept, Q3 1 Oct – 31 Dec and Q4 1 Jan – 31 Mar) For individual taxpayers,
3283-434: The fiscal year is the calendar year, 1 January to 31 December. In China , the fiscal year for all entities is the calendar year, 1 January to 31 December, and applies to the tax year, statutory year, and planning year. In Colombia , the fiscal year is the calendar year, 1 January to 31 December. In Costa Rica , the fiscal year is the calendar year. January to December. As of 2019 when the tax laws changed. In Egypt ,
3350-411: The fiscal year used for government purposes. The calculation of tax on an annual basis is especially relevant for direct taxes , such as income tax. Many annual government fees—such as council tax and license fees, are also levied on a fiscal year basis, but others are charged on an anniversary basis. Some companies, such as Cisco Systems , end their fiscal year on the same day of the week each year:
3417-427: The government cited reasons such as, due to restrictions imposed by the model code of conduct, the commission completed its visit to states only recently, which had a bearing on the detailed assessments of states requirements, comprehensively examining their implications and aligning them to the requirements of the states and the central government will require additional time, and making a five-year coverage available for
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#17327825678693484-427: The government fiscal year (1 April to 31 March). In Lithuania , the fiscal year is the calendar year, 1 January to 31 December. In Macau , the government's financial year is 1 January to 31 December. In Malaysia , the tax year for individuals is the calendar year, from 1 January to 31 December. The Companies Act 2016 does not state when the fiscal year must start for companies, so businesses are free to choose
3551-583: The government fiscal year. In India , the government's financial year runs from 1 April to 31 March the following year. The financial year from 1 April 2024 to 31 March 2025 would generally be abbreviated as FY 2024-25 or( FY24-25) ( FY2024/25),(FY2024/2025),(FY24/25), but it may also be called FY 2025 or FY25 on the basis of the ending year. Companies following the Indian Depositary Receipt (IDR) are given freedom to choose their financial year. For example, Standard Chartered's IDR follows
3618-402: The next 30 June. Financial years are designated by the calendar year of the second half of the period. For example, financial year 2025 is the 12-month period ending on 30 June 2025 and can be referred to as FY2024/25. It is used for official purposes, by individual taxpayers and by the overwhelming majority of business enterprises. Business enterprises may opt to use a financial year that ends at
3685-433: The passage of the Fiscal Responsibility and Budget Management Act, 2003 , some states still incur revenue deficits , so, the commission would have to either recommend the disbandment of revenue deficit grants, or, would have to recommend ways for further fiscal consolidation. The commission's chairman, N. K. Singh , said that the commission would need to define populism , as, the commission's terms of reference (ToR) had
3752-486: The period 2021–22 to 2025–26 to the Hon'ble President of India. The final report with recommendations for the 2021-26 period was tabled in Parliament on February 1, 2021. The commission was set up to give recommendations for devolution of taxes and other fiscal matters for five fiscal years , commencing 1 April 2020. The main tasks of the commission were to "strengthen cooperative federalism, improve
3819-477: The principles of federalism . Five state and two union territory finance ministers met in Andhra Pradesh's capital, Amaravati , and drafted a memorandum to the president , Ram Nath Kovind , seeking changes in the commission's terms of reference. The group of finance ministers eventually met the president on 2018-05-17. In July 2018, the vice president , Venkaiah Naidu —in his capacity as
3886-483: The quality of public spending and help protect fiscal stability". Some newspapers like The Hindu and The Economic Times noted that commission's job was made harder because of the roll-out of goods and service tax (GST) regime in India, as, it had taken certain powers concerning taxation away from the union and the states, and, had given them to the newly formed GST Council . The peer-reviewed journal , Economic and Political Weekly , further noted that even after
3953-604: The state, was asked by the Government of West Bengal to look into restructuring the state's debt , so that it does not become "a permanent drag on the economy of Bengal"; the state's chief minister and All India Trinamool Congress chairperson, convener and president, Mamata Banerjee , said in a press conference, that "we expect that Finance Commission will consider our demand for debt restructuring or waiver". West Bengal government further suggested an alternative devolution formula based on factors like social backwardness, locational complexities and continuation of revenue deficits to
4020-483: The tax devolution system into four pots – "return", "redistribution", "risk sharing" and "reward", while also saying that tax devolution was no more a north–south issue. However, Subramanian's ideas were opposed by Pinaki Chakraborty, a professor at the National Institute of Public Finance and Policy , and a member of the Fifteenth Finance Commission's advisory council , who said that having
4087-582: The tax year be 12 months or 52/53 weeks. However, short years are permitted as the first year or when changing tax years. Most countries require all individuals to pay income tax based on the calendar year. Significant exceptions include: Many jurisdictions require that the tax year conform to the taxpayer's fiscal year for financial reporting. The United States is a notable exception: taxpayers may choose any tax year, but must keep books and records for such year. In some jurisdictions, particularly those that permit tax consolidation , companies that are part of
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#17327825678694154-528: The term, eligibility and powers of the Finance Commission. As per the constitution, the commission is appointed every five years and consists of a chairman and four other members. The most recent Finance Commission was constituted on 31st December 2023 and is chaired by Arvind Panagariya former Vice Chairman of NITI Aayog . As a federal nation, India suffers from both vertical and horizontal fiscal imbalances . Vertical imbalances between
4221-502: Was constituted by the Government of India , after the approval from the President of India , through a notification in the Gazette of India in November 2017. Nand Kishore Singh was appointed as the commission's chairman, with its full-time members being Shaktikanta Das and Anoop Singh and its part-time members being Ramesh Chand and Ashok Lahiri. However Ajay Narayan Jha was appointed replacing Shaktikanta Das who resigned from
4288-400: Was difficult for it to meet in November and December to pass a budget. The Financial year is split into four quarters which cover the following periods: In Austria , the fiscal year is the calendar year, 1 January to 31 December. In Bangladesh , the fiscal year is 1 July to the next 30 June. In Belarus , the fiscal year is the calendar year, 1 January to 31 December. In Brazil ,
4355-571: Was elevated to the status of a full-time member in May 2018 and was accorded the status of a minister of state . Das resigned as member on 11 December 2018, to become the Governor of Reserve Bank of India . In July 2019, the commission's term was extended by a month to November 2019, and its terms of reference (ToR) were expanded by the Union Cabinet and asked it to consider whether "adequate, secure and non-lapsable" funds could be provided for funding defence and internal security, and how would
4422-443: Was harder because of the rollout of goods and service tax (GST), as, it had taken certain powers related to taxation away from states and the Union and had given it to the GST Council. First Finance Commission proposed, the percentage share of net proceeds of income-tax assigned to the states should be following manner: Фщнь Fiscal year A fiscal year (also known as a financial year , or sometimes budget year )
4489-480: Was to find a balance between equity and efficiency, adding that urban and rural local bodies—the constitutionally-mandated third-tier of government in India —needed to be further empowered to stimulate added economic growth. Chief Economic Adviser to the Government of India , Arvind Subramanian , said that the commission may need to function like the first finance commission because of an increased decentralisation and change in India; further suggesting to divide
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