Assessment Year and Financial Year are two important terms used in the context of income tax in India.
Financial Year (FY) is the year in which an individual earns income, and it runs from 1st April of a year to 31st March of the following year. For instance, FY 2022-23 will start on 1st April 2022 and end on 31st March 2023.
Assessment Year (AY), on the other hand, is the year immediately following the Financial Year in which an individual has to file their income tax return (ITR) and pay tax on the income earned in the Financial Year. For example, the AY for FY 2022-23 will be 2023-24.
To summarize, FY refers to the year in which income is earned, while AY refers to the year in which income is assessed for tax purposes.
CAclubindia
