Corona impact: India Inc wants a 15 mth FY
In the wake of the government postponing deadlines for filing tax and earning returns to provide some financial respite amid the Coronavirus contagion, several companies have sought extension of current financial year till June 2020. The stakeholders propose the next financial year to start from July this year and end in March 2020. Experts opine that while the financial measures have definitely provided some relief to these companies, they alone are not enough to tide over these difficulties.
This proposal comes at a time when many companies have seen all their ratios—from debt to equity to return on capital—go for a toss in last one month due to Coronavirus and shutdown that followed. Experts believe that extension of the financial year may distribute the bad period over more months and could help companies recover.
“For several companies there is a need to extend the financial year to June end as most of their ratios have gone for a toss due to Coronavirus. It’s only fair that companies are given additional time because even when tax deadlines are extended, there is a pressure from revenue department to pay before March end, as that’s the year end for them,” opined Dinesh Kanabar, CEO, Dhruva Advisors.