Difference between Financial year (FY) & Assessment year (AY)

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Financial Year (FY) Assessment Year (AY)

• Ensure you understand the difference between

VINOD K AGRAWAL ASSOCIATES, CA
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Avoid mixing up the terms AY and FY

• Taxpayers need be familiar with the terms
  financial year (FY) and assessment year (AY) in
  order to properly complete their tax returns.
• Financial planners and chartered accountants
  regularly use the words "financial year" and
  "assessment year" when preparing income tax
  returns (ITR) for their customers. The
  distinction between the financial year and the
  assessment year is seen here.

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What is ITR?

• To report details about his income and taxes owed
  or paid during the previous year, a person files
  an ITR with the Income Tax Department of India.
• An ITR must have information that is accurate for
  the fiscal year that starts on April 1 and ends
  on March 31 of the following year.

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What is Financial Year (FY)?

• Your earnings are taxed in India by the Income
  Tax Department (I-T) once a year for a year.
• In India, this 12-month period starts on April 1
  and ends on March 31 of the following year.
• This time frame, the year in which you earned the
  income, is referred to as the "financial year" or
  "fiscal year."
• You will therefore be filing an ITR for
  20222023 the filing date is July 31, 2023.
  (unless extended by the government).

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What is Assessment Year (AY)?

• In India, after the fiscal year has ended, people
  file their ITR the following year. This time
  frame is known as an assessment year.
• The time frame for assessing your preceding
  year's income for ITR filing purposes is known as
  an assessment year.
• An evaluation year runs from April 1 through
  March 31 of the subsequent year.
• As a result, you will file an ITR for AY
  20232024

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The difference betweenFY AY
The Financial Year is the calendar year or period
during which money is earned
Simple said, a financial year is when businesses,
salaried employees, and senior citizens make
money and pay taxes.
Tax returns are filed during the assessment year,
which comes after the financial year.
The next year, or AY, is when the tax department
evaluates and assesses the previously obtained
revenue.
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