In Jainism, Diwali is celebrated mainly for this reason:

1. Mahavir Bhagwan’s Nirvana (Moksha) Day

- Diwali is the day when Bhagwan Mahavir, the 24th Tirthankar, attained nirvana (liberation) at Pawapuri in 527 BCE. - Jains remember his final liberation and the “light of true knowledge” he gave to the world. - Lamps (diyas) are lit to symbolize the light of Mahavir’s knowledge removing the darkness of ignorance, not for worldly enjoyment.

1. Gautam Swami’s Keval Jnan (Next Day)

- According to tradition, Gautam Swami, Mahavir’s chief disciple, attained keval jnan (omniscience) the next day. - So these days together remind Jains of: - Mahavir’s complete liberation, and - The awakening of perfect knowledge in his main disciple.

1. End of Jain Year & Start of New Year

- For Jains, Diwali is the last day of the Jain year. - The new Jain year starts on the next day (Pratipada). - It is a time to look back at one’s conduct, repent, and decide to live with more ahimsa, truth, and self‑discipline in the coming year.

1. How Jains Traditionally Observe

- Quiet, simple celebrations with: - Lighting diyas as a spiritual symbol. - Going to the Jain temple, doing puja of Mahavir. - Reading or listening to Uttaradhyayan Sutra (his last teachings). - Fasting or taking small vows, doing pratikraman and swadhyay. - Practicing charity and non‑violence, usually avoiding firecrackers because they harm living beings.

1. Digambar & Shwetambar – Same Essence

- Both Digambar and Shwetambar Jains celebrate Diwali as Mahavir Nirvana Day. - There may be small differences in: - Exact rituals, - Number of fasting days, - Local calendar details, but the core meaning is the same: remembrance of Mahavir’s nirvana and the light of right faith, right knowledge, and right conduct.

You can read a simple detailed explanation here