What is the difference between Financial & Assessment Year? | Jagran Business- Watch Video

The terms "financial year" and "assessment year" are extremely distinct from one another, and taxpayers should be aware of this. No message will be issued or received appropriately if the assessment year or financial year is incorrectly referred to. The terms "financial year" and "assessment year" are decades-old in the context of income tax. Many individuals still have questions regarding these two terms, though. 

Main differences between Financial Year and Assessment Year

The year that the money is earned is known as the financial year. The year that the income is assessed and taxed is known as the assessment year. ITR utilises AY because the assessment year is when income for any given financial year is assessed and taxed.

What is Financial Year? 

The accounting year in which you earn money is known as the financial year. Each year's April 1st marks the beginning of the period, which ends on March 31 of the following year. The phrase "financial year" is occasionally abbreviated as "F.Y." The Assessment Year or the following year must be used to file the income tax return.