Zerodha co-founder Nithin Kamath, known for his witty posts on social media, came up with an interesting tweet recently, informing his followers about why the financial year begins in April.
Kamath posted a picture from his six-year-old son’s history factbook which spoke about the switch from the Julian to the Gregorian calendar in England and its colonies in 1752.
“So this is why our financial year starts in April and not Jan, from my 6-year-old son's history factbook. I don't know how I didn't know until now (sic)," Kamath tweeted.
According to the textbook, the English government voted to change the date of the New Year before switching to the Gregorian calendar. The first day of the year had always been March 25, also known as "Lady Day", but from 1752, they agreed to start the New Year from January 1.
So, in England and its colonies across the world, the year 1751 ran from March 25 to December 31 -- three months shorter than a usual year. Accountants, however, thought the change was unfair and so the financial year did not change in the United Kingdom.
The tweet by Zerodha's Nithin Kamath touched a chord with several Twitter users. Many point ouedt how the financial year follows traditional practices across cultures and even crop cycles.
Meeta Sengupta, an education expert, said, "The financial year also follows the crop cycle, which makes a lot of sense. Seed to revenue is finance."
Twitter user Nishant Soni (@nishant_812) commented, "That's March 25th beginning of Chaitra month approximately as per Hindu calendar. We still celebrate as nav varsh (new year) which is true as per astronomy whereby moon again restarts its cycle. Hence, our financial budget was always in these dates. And hence the financial year."
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