Rule 40 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Rule 40 sets the procedure for a company that wants the Regional Director's approval, under section 2(41) of the Act, to change its financial year. The application is in e-Form RD-1 with listed documents. The Regional Director gets thirty days, with a maximum of two resubmissions and a deemed approval if no order is made. The order is then filed in Form INC-28 within thirty days.
This article is as amended up to G.S.R. 579(E) dated 26 August 2025 (rule text per the MCA e-book to G.S.R. 411(E) of 16 July 2024; later notifications substitute forms only). Later amendments should be checked. For help with a change in financial year, see our compliance advisory service.
The company files e-Form RD-1 with the fee, grounds and reasons, the Board minutes, a power of attorney or memorandum of appearance and details of any application in the last five years. The Regional Director may call for information, with fifteen days to resubmit and a maximum of two re-submissions, and must act within thirty days or the application is deemed approved. The order is filed in Form INC-28 within thirty days of receipt.
Rule 40(1): the application and documents
The application for approval of the concerned Regional Director under sub-section (41) of section 2 shall be filed in e-Form No. RD-1, along with the fee as provided in the Companies (Registration offices and Fees) Rules, 2014, and shall be accompanied by:
| Clause | Document |
|---|---|
| (a) | Grounds and reasons for the application |
| (b) | A copy of the minutes of the Board meeting at which the resolution authorising the change was passed, giving details of the number of votes cast in favour and against |
| (c) | Power of Attorney or Memorandum of Appearance, as the case may be |
| (d) | Details of any previous application made within the last five years for change in financial year and the outcome, with a copy of the order |
Form RD-1 was substituted by G.S.R. 584(E) of 2 August 2023 and again by G.S.R. 579(E) of 26 August 2025, in force from 15 September 2025; those are form-only changes. The rule prints no fee amount; see our Rule 12 fee article.
For the Act's own provisions on the financial year, read our post on the first financial year under section 2(41) and our section 2 definitions guide.
Rule 40(2): defects and resubmission
Where the Regional Director, on examining the application, finds it necessary to call for further information or finds the application defective or incomplete, he gives intimation on the last intimated e-mail address of the person or company that filed the application, directing it to furnish the information or rectify the defects and to resubmit within a period of fifteen days. The proviso says a maximum of two re-submissions shall be allowed. The e-book shows a word after "fifteen days" as omitted; the period is fifteen days.
Rule 40(3): the decision
| Clause | Position | What the rule says |
|---|---|---|
| (a) | Information not provided or defects not rectified to the Regional Director's satisfaction within the period allowed | The Regional Director rejects the application with reasons within thirty days from the date of filing, or within thirty days from the date of the last resubmission, as the case may be |
| (b) | Application found in order | The Regional Director allows it and conveys the order within thirty days from the date of the application or the last re-submission, as the case may be |
| (c) | No order for approval, resubmission or rejection explicitly made within the stipulated thirty days | The application is deemed approved, and an approval order shall be automatically issued to the applicant |
The deemed approval in clause (c) is only for the case where no order of any kind has been made within thirty days. A resubmission request or a rejection, once explicitly made, prevents it.
Rule 40(4): filing the order
The order conveyed by the Regional Director shall be filed by the company with the Registrar in Form No. INC-28, along with the fee as provided in the Fees Rules, within thirty days from the date of receipt of the order. The rule counts from receipt and prints no calendar date.
Steps and clocks together
| Step | Period as printed |
|---|---|
| Resubmission after a request for information or defects | Fifteen days, maximum two re-submissions |
| Regional Director's order, rejection or deemed approval | Thirty days from filing or from the last resubmission |
| INC-28 with the Registrar | Thirty days from receipt of the order |
Example: Lakeshore Hospitality Private Limited wants a different financial year. Its Board passes the resolution and the company files RD-1 with the grounds, the Board minutes with the vote details, the power of attorney, and a note that no application has been made in the last five years. The Regional Director asks for one clarification; the company resubmits within fifteen days. No order is made within thirty days of the resubmission, so the application is deemed approved and an approval order is issued automatically. The company then files the order in INC-28 within thirty days of receipt.
Practical points
- Gather the five-year history of any earlier application and its order before filing; clause (d) asks for it.
- Keep the e-mail address on the application current; the Regional Director's intimation goes to the last intimated address.
- Track both clocks: fifteen days for resubmission, thirty days for the decision, and thirty days for INC-28.
- Do not count on deemed approval if the Regional Director has made any explicit order.
For group reporting, see our post on holding company AGM and subsidiary accounts. For the other Regional Director filing in this rule set, see our article on rule 41, and on INC-28 for articles on conversion see rules 10 and 33.
Need help changing your financial year?
A financial year change touches accounts, audit and tax calendars as well as the RD-1 filing. TaxClue can plan the change, prepare RD-1 and follow it to the INC-28 filing; see our compliance advisory page.
Key takeaways
- RD-1 goes to the Regional Director under section 2(41), with four listed items.
- Resubmission: fifteen days, maximum two times.
- The Regional Director decides within thirty days; silence means deemed approval.
- The order is filed in INC-28 within thirty days of receipt.
- RD-1 was substituted in 2023 and 2025; both are form-only changes.
Read next
- Rule 41: converting a public company into a private company
- Rule 28: shifting the registered office within the same State
- First financial year under section 2(41)
- Section 2 of the Companies Act, 2013: definitions, part 1
Disclaimer: Based on the Companies Act, 2013 rules named above as consolidated in the MCA e-book (consulted on 3 October 2026), with the later notifications the article names. Later amendments, fees, forms and the Companies Act, 2013 provisions referred to should be checked. This article is general information, not legal advice; check the official text before acting.