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PY for newly incorporated company

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Vedangi Deshmukh

104 Points Posted on 22 January 2021

As in case of newly incorporated company previous year will be the year from which it starts it's operation, till ending of financial year.

If ABC ltd is incorporated on 10.01.2020, it will prepare it's finacials for period 10.01.2020 to 31.03.2022 (as per definition of financial year given in companies Act).
Then what will be the previous year for the ABC Ltd?

Replies (2)

Quick Summary

This discussion clarifies the definition of the 'previous year' for a newly incorporated company. It explains that the first financial period runs from the company's incorporation date until the end of the relevant financial year. For example, a company incorporated on 10.01.2020 would prepare financials from 10.01.2020 to 31.03.2020 for the financial year 2019-20.

CA. Sourav Sarkar

Chartered Accountant

16188 Points Posted on 22 January 2021

If it is incorporated on 10.1.2020 then the financials should be prepared from 10.1.2020 to 31.3.2020 for
FY 2019-20 or previous year 2019-20 and for fy 2020-21 from 1.4.2020 to 31.3.2021