Hi Saqib,
1. is it recommended to go from overall to annual budget release check. is there any inconsistency error may occurs in future for such change? -
Depends upon the valid business reason why they need to change their approach for Budgeting.. From a sol. perspective can be done..
2. if we activate annual budget release what approach should we follow:
I would suggest to use new Budget Profile and make that Annual. Don't change the existing Budget settings..As this will create data inconsistency for the projects already on an Overall Budget and Overall Release check..