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Difference between Financial year and assessment year

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MPR Sanjay Kumar

1675 Points Posted on 28 January 2023

Dear Chartered Accountants and knowledgeable person

Now 2023 , my officer told to me take last 3 AY of ITR computation...so now for which year I have to take plse help me for last three AY years????

And also please explain the AY and FY

Replies (6)

Quick Summary

This discussion clarifies the distinction between a Financial Year (FY) and an Assessment Year (AY) for income tax purposes. The Financial Year is the period from April to March during which income is earned and taxes are paid through methods like advance tax and TDS. The Assessment Year, which follows the Financial Year, is when the Income Tax Department assesses the income earned in the preceding Financial Year.

Prashant Daga

136 Points Posted on 28 January 2023

AY 2020-21 AY 21-22 & AY 22-23
Financial year means accounting year I.e April to March and assessment year jis year me income ka assessment Hota h. in simple language next year of Financial year example FY 22-23 ke liye assessment year 23-24 hoga

MPR Sanjay Kumar

1675 Points Posted on 28 January 2023

Thank you so much @ prasanth daga

sabyasachi mukherjee

Profession

19978 Points Posted on 29 January 2023

In income tax parlance previous year is the accounting year.
assesment year is the next year.

prasad Nilugal

GST Practitioner & Accounts

8998 Points Posted on 29 January 2023

In the Financial year which is from 1st April 2022 to 31st March 2023 , you pay all your Income tax liabilities by way of Advance Tax , TDS , self assessment tax etc.

Assessment year which is from 1st of April 2023 to 31 March 24 , all your tax liabilities paid in the financial year 22-23 , will be assessed by the Income tax department , therefore it is assessment year. Also in section 2(9) of the income tax Act define assessment year.