5 confusing pairs of income tax terms you should know of - Financial year vs Assessment year

Financial year: For tax purposes, the financial year (FY) is the year in which you earn your income and also pay your taxes on this earned income. A financial year starts on 1 April and ends on 31 March. So, if you have worked and earned income in 2017-18, it will be considered the financial year.Assessment year: On the other hand, assessment year (AY) is the year following the financial year, in which your income is assessed. This also lasts from 1 April to 31 March and is the year in which you file your income tax returns for the taxes paid in the relevant financial year. In the above example, if 2017- 18 is the financial year, 2018-19 will be regarded as the assessment year.Text: ET Wealth Financial year vs Assessment year