For FY 2023-2024, what is the cut off date in March 2024, upto which (the trade date & including this date), the accounting should be done in FY 2023-2024?
Trades taken on and upto 31st March, 2024 will fall under FY 23-24
cc : @Quicko
Meher, It’s quite surprising, isn’t it? One would think that someone who is actively involved in stock trading and presumably filing income tax returns annually would be aware of these basic accounting standards. It’s always better to refrain from giving advice, especially when it’s about something as important as financial matters, if one isn’t fully informed. After all, misinformation can lead to unnecessary confusion and complications.
It seems like there’s a bit of confusion about the cut-off date for accounting purposes in the financial year (FY) 2023-2024 and FY 2024-2025.
In general, the financial year in India starts on April 1 and ends on March 31 of the next year. So, for FY 2023-2024, the start date would be April 1, 2023, and the end date would be March 31, 2024. Any transactions that occur within this period would be accounted for in FY 2023-2024.
For FY 2024-2025, the start date would be April 1, 2024, and the end date would be March 31, 2025. Transactions that occur within this period would be accounted for in FY 2024-2025.
However, in the context of stock trading, the cut-off date for which trades belong to which financial year can depend on the settlement date of the trades, not the trade date. If the payout of a trade made in late March 2024 falls into April 2024, then for accounting purposes, that trade might be considered part of FY 2024-2025, even though the trade date was in FY 2023-2024.
This practice is followed by stock brokers and is in accordance with the guidelines set by the Income Tax Department.
Do you have a authoritative source/reference for this ?