Gudi Padava falls on Chaitra Shukla Pratipada (first day of bright fortnight of Hindu lunar month Chaitra). This festival is also known as Nav Sanvatsar Pratipada (First date of the Year)
It is believed that:
1-According to the Hindu time calculations New Year begins from this day. New Year in the name of the King Vikramaditya (Vikrami Sanvatsar) starts on this day.
2-Brahma started creation of the Universe on this day.
3-Satyayug (Truth era) began on this day.
4-Lord Sri Ram killed Vanar King Vali on this day.
5-This is one of the 3½ days in-the Hindu Lunar calendar; whose every moment is considered auspicious.
Chaitra Navratri begins on this day, Durga Saptishati path (prayer of Goddess Durga) is started and barley is grown in a vessel on this auspicious day. After taking a bath, wearing clean clothes, Pooja (prayer) of Navgrah Manda/ and Lord Brahma should be performed before the idol or picture of Lord Brahma, after the Pooja (worship) new panchang with Dakshina (donation) should be donated to a Brahmin. Gayatri Jap (repetition of hymn) and Havan (fire sacrifice) should also be done as much as possible for happiness and well being during the New Year. People should greet the friends and relatives on the New Year.
Aum Namah Shivaye
Source: Book: Hindu Festivals By Shashi Kant Kaushik