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CA Intermediate · Taxation · Basic Concepts

Anita Pvt Ltd, an Indian company incorporated in 2015, wants to know whether it is a 'person' and what its tax year is. It also owns a new business started on 1 November 2026. What is the tax year for the income of the new business from 1 November 2026 to 31 March 2027?

The tax year is 2026-27, running from the date the business is set up on 1 November 2026 to 31 March 2027. For a newly set up business the first tax year can be shorter than twelve months, and the company is taxed for that period.

  1. ATax year 2026-27, covering the period from 1 November 2026 to 31 March 2027Correct
  2. BTax year 2027-28, as the business began in the second half
  3. CA tax year of 12 months from 1 November 2026 to 31 October 2027
  4. DTax year 2026-27 but only after completing 12 months of business

Explanation

For a business newly set up, the tax year is the period from the date of setting up to the following 31 March, so it is a shorter tax year. The company being a person does not change this. A 12-month period from 1 November is not allowed since the tax year is tied to 1 April to 31 March.

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