Tax Year

Question 1

What is a normal and special Tax year?

Answer 1

Normal tax year
The tax year shall be a period of 12 months ending on June 30th (hereinafter referred to as normal tax
year‘) and shall be denoted by the calendar year in which 30th June falls.
A calendar year is a year that ends on December 31.
(2) Special tax year
Where a person is allowed, to use a 12 months period different from the normal tax year, such period shall be
that person‘s tax year (hereinafter referred to as „special tax year‟) and shall, be denoted by the calendar
year relevant to normal tax year in which the closing date of the special tax year falls.

Question 2

Who permits a change of the tax year in case of a class of persons?

Answer 2

The Board,-
(i) In the case of a class of persons having a special tax year may permit, through the official Gazette, to
use a normal tax year; and
(ii) in the case of a class of persons having a normal tax year may permit, through the official Gazette, to
use a special tax year.

Question 3

Who permits a change of the tax year in case of a person?

Answer 3

A person may apply, in writing, to the Commissioner to allow him to use a 12 months‘ period, other than
normal tax year, as special tax year and the Commissioner may allow him. The order will be passed by the
Commissioner if the condition mentioned below (in sub-section (5)) is fulfilled.

A person using a special tax year, may apply in writing, to the Commissioner to allow him to use normal
tax year and the Commissioner may allow him. The order will be passed by the Commissioner if the
condition mentioned below (in sub-section (5)) is fulfilled.

Question 4

Permission of change in tax year Sec 5.

Answer 4

The Commissioner shall grant the permission to change the tax year:
 from normal to special or
 special to normal
only if the person has shown a compelling need. The Commissioner may impose conditions while giving
permission.

Question 5

After which the commissioner order change in the tax year?

Answer 5

An order by Commissioner of change in tax year shall be passed after providing to the applicant an
opportunity of being heard. If the application is rejected the Commissioner shall mention in order the
reasons for rejection.

Question 6

Explain the withdrawal of permission.

Answer 6

The Commissioner may by order, after providing an opportunity of being heard, withdraw the permission
granted regarding change in tax year.

Question 7

When change of tax year is effective?

Answer 7

An order of change in tax year [under sub-section (3) or (4)] shall take effect from 1st day of the
special tax year or the normal tax year.

Question 8

What is a transitional tax year?

Answer 8

Transitional tax year
Where the tax year of person changes, the period between:
 the end of the last tax year prior to change and
 the date on which the changed tax year commences
shall be treated as a separate tax year, to be known as the ―transitional tax year‖.

Question 9

When a person is dissatisfied with an order of commissioner what can do?

Answer 9

A person dissatisfied with any order of Commissioner (under sub-section (3), (4) or (7)) may file a review
application to the Board. The decision by the Board shall be final.