Difference Between Financial Year and Assessment Year
Financial Year (FY) and Assessment Year (AY) are two very basic terms used in Income Tax, which we all should understand to avoid any confusion. If you understand these concepts clearly, then only you can understand the concepts of advance tax, self assessment tax, TDS, etc. Therefore, today we are going to understand these two terms in the simplest way. Financial Year (FY) and Assessment Year (AY) both consist twelve months beginning from 1st of April and ending on 31st of March. Financial year is a period of twelve months beginning from 1st April and ending on 31st March. Assessment year is also a period of twelve months beginning from 1st April and ending on 31st March, but these twelve months of assessment year are immediately succeeding (following) a particular financial year. In short, during financial year, a person earns the income and during assessment year that income is assessed. The financial year is also called Previous Year (PY). Let's understand these concepts with ...