Rule 75 of The General Financial Rules 2017 Period of Accounts
Original Rule Text
Visual Summary
April 1st to March 31st.
All Central Govt. transactions.
Applies to Central Government.
Executive Summary
Rule 75 of The General Financial Rules, 2017, succinctly defines the financial year for the Central Government’s annual accounts. It mandates that all transactions occurring between April 1st and March 31st of the subsequent year must be recorded within that specific financial year. This rule establishes a fundamental accounting period, ensuring consistency and clarity in government financial reporting.
In-Depth Analysis of the Rule
Rule 75 is a foundational provision within the General Financial Rules, 2017, establishing the standard accounting period for the Central Government. Its simplicity belies its critical importance in ensuring structured and consistent financial management across all government entities.
Breakdown of the Rule
- Definition of Financial Year: The rule explicitly states that the financial year for the Central Government commences on April 1st and concludes on March 31st of the following year. This is a standard fiscal period widely adopted.
- Scope of Transactions: It specifies that the annual accounts must record all transactions that “take place” during this defined financial year. This emphasizes a cash-based or accrual-based recording within the designated period, depending on the overall accounting principles (Rule 74 specifies cash-based).
- Consistency in Reporting: By setting a clear and consistent period, the rule facilitates comparative analysis of financial performance year-on-year and ensures uniformity in reporting across different government departments.
Practical Example
Consider a Central Government Ministry. All its financial activities, from receiving funds to incurring expenditure, between April 1, 2024, and March 31, 2025, must be meticulously documented and reported as part of the annual accounts for the financial year 2024-2025. This ensures that the financial statements accurately reflect the operations within that specific twelve-month cycle, preventing misallocation of transactions across different fiscal periods.
Related Provisions
Rule 75 is closely related to other rules that govern the overall financial management and accounting framework:
- Rule 42 of The General Financial Rules, 2017 (Financial Year): This rule reiterates the definition of the financial year, reinforcing the period established by Rule 75.
- Rule 74 of The General Financial Rules, 2017 (Cash based Accounting): This rule specifies that government accounts are prepared on a cash basis, which directly impacts how transactions are recorded within the financial year defined by Rule 75.
- Rule 71 of The General Financial Rules, 2017 (Preparation and presentation of Accounts): This rule outlines the overall process for preparing and presenting annual accounts, for which Rule 75 defines the reporting period.
Learning Aids
Mnemonics
- All Payments Recorded In Ledgers – March All Reports Complete Here (APRIL-MARCH): Helps remember the start and end months of the financial year.
Process Flowchart
Multiple Choice Questions
1. According to Rule 75 of The General Financial Rules, 2017, what is the defined period for the Central Government’s financial year?
- A) January 1st to December 31st
- B) July 1st to June 30th
- C) April 1st to March 31st
- D) October 1st to September 30th
Show Answer
Correct Answer: C) April 1st to March 31st
2. Rule 75 of The General Financial Rules, 2017, applies to the annual accounts of which entity?
- A) State Governments
- B) Local Bodies
- C) Central Government
- D) Public Sector Undertakings
Show Answer
Correct Answer: C) Central Government
3. What type of transactions are to be recorded in the annual accounts as per Rule 75 of The General Financial Rules, 2017?
- A) Only revenue transactions
- B) Only capital transactions
- C) Transactions which take place during the financial year
- D) Transactions due but not yet paid
Show Answer
Correct Answer: C) Transactions which take place during the financial year
4. Which document’s transactions are governed by the period defined in Rule 75 of The General Financial Rules, 2017?
- A) Budget Estimates
- B) Annual Financial Statement
- C) Annual Accounts of the Central Government
- D) Appropriation Bills
Show Answer
Correct Answer: C) Annual Accounts of the Central Government
5. If a transaction occurs on April 15th, 2024, under which financial year’s accounts would it be recorded according to Rule 75 of The General Financial Rules, 2017?
- A) 2023-2024
- B) 2024-2025
- C) 2025-2026
- D) It depends on the payment date
Show Answer
Correct Answer: B) 2024-2025
Frequently Asked Questions
Q1: Why is the financial year defined as April 1st to March 31st in Rule 75 of The General Financial Rules, 2017?
A1: This period is a long-standing fiscal convention in India for government accounting. It allows for the completion of budget processes and financial reporting cycles in a structured manner, aligning with the country’s economic and administrative calendar.
Q2: Does Rule 75 of The General Financial Rules, 2017, apply to State Governments or only the Central Government?
A2: Rule 75 specifically states that it applies to “the annual accounts of the Central Government.” While State Governments have their own financial rules, this particular rule is confined to the Union’s financial reporting.
Q3: What is the significance of recording transactions “which take place” during the financial year as per Rule 75 of The General Financial Rules, 2017?
A3: This emphasizes that the accounts should reflect the actual flow of funds and activities within the specified period. It ensures that financial statements accurately represent the operations of the government during that fiscal cycle, preventing misrepresentation by including transactions from other periods.
Key Takeaways
- Rule 75 defines the Central Government’s financial year as April 1st to March 31st.
- All transactions occurring within this period must be recorded in the annual accounts for that year.
- This rule ensures consistency and clarity in government financial reporting.
- It is a fundamental principle for the preparation of Central Government accounts.
Conclusion
Rule 75 of The General Financial Rules, 2017, serves as a cornerstone for financial accountability within the Central Government. By precisely defining the period of accounts, it lays the groundwork for transparent, consistent, and comparable financial reporting, which is essential for effective governance and public trust.