It may be less than or equal to 12 months. We've learned from on-the-ground experience about these terms specially the product comparisons. Assessment year (AY) is the immediate year following the FY wherein income of the previous year or that particular FY is assessed. 2016-17, then the assessment year will be 2017-18. Can the Previous Year be less than 12 months? Normally, the previous year is a period of 12 months, but it can be shorter than that. Assessment year is the evaluation year of the financial year. The definition of the assessment year is given in Section 2(9) of the Income Tax Act, 1961. Privacy, Difference Between Accounting Profit and Taxable Profit, Difference Between Formative and Summative Assessment, Difference Between Short Term and Long Term Capital Gain, Difference Between Assessment and Evaluation, Difference Between Revenue, Profit and Income. As per present tax laws, Assessment Year means the period 12 months commencing on the first day of April. The previous year is either less than or equal to 12 months while the assessment year is always 12 months long. We pay Income Tax as a percentage of all the sources of income in the financial year which starts from 1st April of one year to 31st March of the succeeding year. The difference between Previous Year and Assessment Year is that while Previous Year is the year when the actual transactions happened or the period to which our data of Income sources belong, Assessment Year is the following (for tax revenue collection) or any other year in which the data is processed. For example – if you have earned an income between 1st, April 2016 to 31st, March 2017, then 2016-2017 will be referred to as Financial Year and Assessment Year would be between 1st, April 2017 to 31, March 2018. In Income-tax Act, 1961 is “Assessment Year” defined in Section 2(9) as: “Assessment Year” means the period of twelve months commencing on the 1st day of April every year. As per section 2(34) and 3, previous year means the financial year immediately preceding the assessment year. As per section 2(34) and 3, previous year means the financial year immediately preceding the assessment year. The word previous is a big give away. How to file old ITRs? Explain. As a general rule, the income earned in the previous year is taxed only in the assessment year but in the following cases, the income earned is taxed in the same year in which it is earned or received. Not every taxpayer would pay the tax at the same time and same day. It is the financial year, in which the income earned in the previous year is taxable. This means a period of 12 months commencing on 1st April every year. This year is important in terms of the collection of data regarding income and their sources. ): As per the ITA, a Previous Year is the financial year immediately preceding the assessment year. It is the financial year preceding the assessment year. Every year we pay taxes over the Income earned in the Previous Year (that is, the transactions that took place in the preceding year of the current year). Previous year [Section 3] :– It means the financial year immediately preceding the assessment year. The activity is assessed in entire period. The year is important to analyze data and calculate Income Tax. Assessment Year is the year in which one file income tax returns of the year prior to it (i.e. Financial Year (F.Y. With this requirement comes to us, the terms in consideration “Previous Year” and “Assessment Year”. For instance, income of previous year 2020-21 is assessed during 2021-22. Assessment year is the year in which the income earned is assessed. This means a period of 12 months commencing on 1st April every year. | Definition, Theories, Pros and Cons, “The purpose of Ask Any Difference is to help people know the difference between the two terms of interest. That means it’s the period from 1 st April to 31 st March. The taxes collected are basically, collected for the Previous year but in the Assessment Year. On the other hand, Assessment Year refers to the period of twelve months, starting on the 1st of April. In an assessment year, you file your income tax returns of the previous year. The assessment year is the year in which the previous year’s taxable income of the assessee is being assessed. ASSESSMENT YEAR AND PREVIOUS YEAR Previous year is a period in respect of which a person has to pay tax. It is a period of twelve months starting from April I of every year and ending on March 31 of the next year. “Assessment Year” means the period of 12 months commencing on the 1 St. day of April every year. Previous Year in case of a continuing Business : It is the Financial Year preceding the Assessment Year. For example the current assessment year 2020-21 started on 1 st April 2020 and it will end on 31 st march 2021. The previous year is the year for which the data of activity and income is collected and compiled whereas the assessment year is the year in which Income Tax is calculated and collected. Section 3 of the Income-tax Act, 1961 subject to its proviso, defines “Previous year” for the purposes of the Income-tax Act, as the financial year immediately preceding the assessment year. Assessment year is the year followed by the financial year in which the evaluation of the previous year’s income is done, tax is paid on the same and ITR is filed. Hello Previous Year and Assessment year are the Commonly used terms in Income Tax.According to Income tax Act Previous Year means a Year in Which Income is Earned and Assessment Year means Income of Previous Year is assessed and Tax is Paid. Assessment Year is what is used in Income Tax Utilities, ITR and Challan 280. Check Also: [1000+] B.Ed Lesson Plans; What is the difference?Financial Vs Previous Vs Assessment Year. Common FAQs on Assessment Year(AY) & Financial Year(FY) When it comes to income tax people are often heard talking about income tax return filing, income tax notices, the refund status, deductions, tax benefits and much more. The year in which income tax liability for the previous year arises. For instance, if we consider the financial year starting from 1 April 2020 to 31 March 2021, then it is known to be Financial year 2020-21. The real activities take place in this year. We write on the topics: Food, Technology, Business, Pets, Travel, Finance, and Science”. The income earned during the previous year is assessed or taxed in the assessment year. What does Previous Year mean? Financial Year is the year or the time period within which income is earned. The year in which income is earned is the previous… Section 2 of The Income Tax Act, 1961 has defined Assessment Year and Previous Year as follows:- Section 2(9) defines Assessment Year as- 1. It is the year in which the income that one has earned in the financial year that is just ended is evaluated. Difference Between Life Assurance and Fire Insurance (With Table), What is Microeconomics? (b) Newly set up business or profession. Previous Year (PY) You should be able to infer this yourself. It is a full financial year (that is, 12 months). For example – if you have earned an income between 1st, April 2016 to 31st, March 2017, then 2016-2017 will be referred to as Financial Year and Assessment Year would be between 1st, April 2017 to 31, March 2018. As such it is known as financial year. The previous year is the year for which the data of activity and income is collected and compiled whereas the assessment year is the year in which Income Tax is calculated and collected. The year in which income is earned is the previous year and such income is taxable in the immediately following year which is the assessment year. For Financial Year 2014-15 the Assessment Year will be 2015-16. 1-4-2017 to 31-3-2018. Balwant Jain, CFO of Apnapaisa.com explains what is assessment year and previous year. For example, if you file return for F.Y. Reimbursive travel 3702/3703 not equal to travel transactions. Difference between Financial Year and Assessment Year. Therefore, 2021-22 is the assessment year for assessment of income of the previous year 2020-21. This is a general rule. Financial year is the year for which an assessee's income for the previous year is assessed under the IT Act for taxation. 4. When we talk about paying taxes or collecting taxes in the current year, the year preceding the current year is the Previous Year. Previous Year is the year concerning the income on which tax is levied. ASSESMENT YEAR `Assessment Year’ is the period of 12 months commencing from the 1st date of April and ending on the 31st day of March next year. Assessment year may be defined as a year in which the income tax of the previous year is to be assessed. ): As per the ITA, a Previous Year is the financial year immediately preceding the assessment year. 0. Quick Links. Hie Kruthika, Assessment Year ----- - Assessment Year (AY) is defined in section 2 (9) of Income Tax Act, 1961 as a year in which income of an assessee of the previous year/last year needed to be assessed. You will understand the difference clearly through the following example. Income of previous year of an assessee is taxed during the next following assessment year. The year is important for collection of actual Tax Revenue for the government. It is usually the financial year preceding the current financial year. Previous Year is the financial year, in which the assessee earns income. Income earned in the previous year 2019-20 is taxable in the assessment year 2020-21. The actual transactions and data collection take place in the previous year while the calculation and collection of taxes by the Government happens in the Assessment Year. The year in which income is earned in the previous year and such income is taxable in the immediately following year which is the assessment year. Previous Year (PY) You should be able to infer this yourself. Previous Year vs Assessment Year?? For instance, if we have to process and evaluate the tax records of 2019, the previous year would be 2019 (the year for which data is collected), while 2020 would be the assessment year (when the actual process of analysis and tax collection takes place). Define Previous year as per section 3 of Income Tax Act, 1961. For example, if the latest date in the dates argument refers to the year 2009, then this function returns all dates for the year of 2008, up to the specified year_end_date. Difference between Assessment Year and Financial Year. maintains its accounts for a period of 12 months i.e. E.g. The differentiation between the previous year and the assessment year becomes very important to understand the basic concepts and principles of tax collection and to assess the data more efficiently. This is […] Not all the Company Information is available. Meaning of f Assessment Year Assessment Year . Difference Between Perfect Competition and Monopolistic Competition, Difference Between Accounts Receivable and Accounts Payable, Difference Between Stale Cheque and Post-Dated Cheque, Difference Between Lok Sabha and Rajya Sabha, Difference Between Direct Cost and Indirect Cost, Difference Between Micro and Macro Economics, Difference Between Developed Countries and Developing Countries, Difference Between Management and Administration, Difference Between Qualitative and Quantitative Research, Difference Between Real Flow and Money Flow, Difference Between Single Use Plan and Standing Plan, Difference Between Autonomous Investment and Induced Investment, Difference Between Packaging and Labelling, Difference Between Discipline and Punishment, Difference Between Hard Skills and Soft Skills, Difference Between Internal Check and Internal Audit, Difference Between Measurement and Evaluation. “Assessment Year” means the period of 12 months commencing on the 1 St. day of April every year. In simple terms, assessment year means the current year and previous year means the last or financial year. As such for the assessment year 2014-15, the previous year for a continuing business is 2013-14 i.e. Previous Year can be understood as the financial year in which the assessee makes money. The year in which income is earned is the previous year and such income is taxable in the immediately following year which is the assessment year. And they are: 1. In short its written as FY or PY. 2. Previous Year is important to collect data regarding the sources of Income and their activity while the Assessment year is important for the assessment of Income Tax revenue by the Government. The time period plays an important role in setting limits to data and to have the desired data. 1-4-2013 to 31-3-2014. In both cases their income sources aren’t active the entire 12 month period, therefore, their income would be considered only for the months they were active. Financial Year (F.Y. Transfer of property to avoid tax. Or Assessment year is the tax calculation year. (a) Previous year in case of a continuing business. Assessment year is the immediately succeeding year of the financial year. As a general rule, the income earned in the previous year is taxed only in the assessment year but in the following cases, the income earned is taxed in the same year in which it is earned or received. Assessment Year is the year in which one file income tax returns of the year prior to it (i.e. As such for the assessment year 2014-15, the previous year for a continuing business is 2013-14 i.e. Person Leaving India. 3. But oneSEE DETAILS . ? In India, the Govt. The main differences between previous year and assessment year are given hereunder: Previous Year can be understood as the financial year in which the assessee makes money. As far as Financial Accounting is concerned, the time period is the Financial year (1st April of a year to 31st March of the next year) and not the usual year. Difference between Assessment Year and Previous Year are: ASSESSMENT YEAR. For instance, the current assessment year is A.Y.2001-2002 which starts from 1st April 2001 and ends on 31st March 2002. Definition:- Assessment year may … Discontinued Business. The year in which income is earned in the previous year and such income is taxable in the immediately following year which is the assessment year. How to file Previous Year's ITR online now? In short its written as FY or PY. A few years ago we as a company were searching for various terms and wanted to know the differences between them. The expressions the past year and the last year both generally refer to the previous 12 months although they are sometimes used in different contexts.. Previous Year means the financial year immediately preceding the Assessment Year. The assessment year is the financial year during which income of a persons relating to the relevant previous year is assessed/calculate to tax. Ask Any Difference is a website that is owned and operated by Indragni Solutions. The word previous is a big give away. All taxpayers are required to follow a uniform Previous Year. E.g. A short form of this is PY which stands for Previous Year. AY is the year in which income tax returns are filed for income that was earned in the previous Financial Year that ended. Yeah you are right – this is the year for which your income is being assessed in the Assessment Year. Such exceptions to the general rule are given in Sections 172 and 174 to 176. Hi, What are the differences between the Previous Year and Assessment Year? The income of the previous year shall be assessed in the subsequent assessment year. The year in which we earn is called Previous Year in the words of the Income Tax Act. It is exactly 12 month period because the processes of calculation, collection and assessment are spread over different periods of the year. from 1st April to 31st March every year. A financial year has a double role to play: it is a previous year as well as an assessment year. This means a period of 12 months commencing on 1 st April every year. Such exceptions to the general rule are given in Sections 172 and 174 to 176. A must for all commerce students in Graduation CA CS CMA MCom MBA. Section 2 of The Income Tax Act, 1961 has defined Assessment Year and Previous Year as follows:-Section 2(9) defines Assessment Year as-Period starting from April 1 and ending on March 31 of the next year. We pay the Income-tax in the year succeeding the year in which we earned. Difference between Assessment Year and Previous Year are: ASSESSMENT YEAR. Previous year is the year in which income is earned. For example, the current year is 2017-2018. Accordingly Previous Year in the case of a continuing business shall be the Financial Year immediately preceding the relevant Assessment Year, whereas Previous Year in the cases of newly set up business or for new source of income shall be the period commencing from the date of new business set up or source of income coming into existence to the forthcoming 31st March of that Financial Year immediately preceding the relevant Assessment Year. As per present tax laws, Assessment Year means the period 12 months commencing on the first day of April. Assessment year The term has been defined under section 2(9). The previous year is either less than 12 or equal to 12 months while the assessment year is always a complete period of 12 months. At present the previous Year 2012-2013 (1 … free download online bEd distance regular previous year model sample entrance question paper of assessment of learning. Assessment Year is the financial year, in which the income of the assessee earned during the previous year is evaluated and taxed. (b) Newly set up business or profession. What does Assessment Year mean? Calculation of taxes requires time for assessment, calculation and payment of taxes. This means a period of 12 months commencing on 1 st April every year. Income of an assesse for a previous year is charged to income-tax in the assessment year following the previous year. The last year of their lives/marriage etc. Therefore, 2021-22 is the assessment year for assessment of income of the previous year 2020-21. For example, the current year is 2017-2018. Income […] 1-4-2017 to 31-3-2018. 2. The income earned during the previous year is assessed or taxed in the assessment year. Belated returns FY AY 2012-13,2013-14,2014-15, … But this rule has certain exemption. Similar Posts. It is mandatory for all assessee to follow financial year (from 1st April to 31st March) as previous year for Income-Tax purpose. In Just 5 minuteshttps://drive.google.com/file/d/1VM7LgUJe4vjPliCqLytPz94b4V8oOfmL/view Assessment Year [Section 2(9)] : Definition under Income Tax Act. It is equal to 12 months if the sources of income were active throughout the year and less than 12 months if the sources were set up late or ended up before the financial year ended. For example, a person retires in the middle of the financial year or a startup company emerges in the middle of a financial year. Shipping business of a non-resident. The previous year is the year which becomes the source of Income activities and the year for which data is collected whereas Assessment year is the year in which the outputs of the previous year are subjected to taxes levied by the government. - 2 (9)] Meaning and Definition Assessment year refers to a year in which financial year is assessed. Assessment year The term has been defined under section 2(9). As such it is known as financial year. Difference Between Previous Year and Assessment Year (With Table), https://help.myitreturn.com/hc/en-us/articles/219720747-What-is-an-Assessment-Year-, https://tax2win.in/tax-glossary/previous-year, Comparison Table Between Previous Year and Assessment Year (in Tabular Form), Main Differences Between Previous Year and Assessment Year, Difference Between Except and Besides (With Table), Difference Between McAfee LiveSafe and Total Protection (With Table), Difference Between HCPCS and CPT (With Table), Difference Between Catholic and Lutheran (With Table), Difference Between Articles of Confederation and Constitution (With Table), Difference Between Verbal and Non-Verbal Communication (With Table). This is the assessment year. Related Posts. All taxpayers are required to follow a uniform Previous Year. A must for all commerce students in Graduation CA CS CMA MCom MBA. It is the year in which the income that one has earned in the financial year that is just ended is evaluated. Assessment Year [Section 2(9)] : Definition under Income Tax Act. Yeah you are right – this is the year for which your income is being assessed in the Assessment Year. It has to be equal to 12 months. Period starting from April 1 and ending on March 31 of the next year. The assessment year is the year in which the previous year’s taxable income of the assessee is being assessed. For instance, income of previous year 2020-21 is assessed during 2021-22. Assessment year [Section 2(9)] The term has been defined under section 2(9). AY is the year in which income tax returns are filed for income that was earned in the previous Financial Year that ended. Assessment year is the year followed by the financial year in which the evaluation of the previous year’s income is done, tax is paid on the same and ITR is filed. Previous Year is same as Financial Year. It can be less than or equal to 12 months. Explanation If a person "A" earned income in financial year 2016-17, then he will pay income tax in assessment year 2017-18. As such for the assessment year 2018-2019, the Previous Year for continuing business is 2017-2018 i.e. When talking about the present, the financial year preceding the current financial year is usually the Previous Year and the current year itself is the Assessment Year. It is usually the current financial year. When we talk about paying or collecting taxes in the current year, the current year itself is the Assessment Year. This means a period of 12 months commencing on 1st April every year. On the other hand, Assessment Year refers to the period of twelve months, starting on the 1st of April. All these processes are undertaken in the year, succeeding the year for which the taxes are collected. Income for previous tax year, no assessment year given. While creating databases for various reasons or specifically for Income Tax records, the time period is a must. Person leaving India, permanently having no intention of coming back. Financial Year). It is the financial year, in which the income earned in the previous year is taxable. Association of persons, Body of individuals or any artificial juridical person established for a definite objective. In income tax act the previous year is a period of 12 months beginning from April 1 to March 31. Conversely, the assessment year is always a period of 12 months. Previous Year in case of a continuing Business : It is the Financial Year preceding the Assessment Year. Person is likely to transfer, sell or dispose of assets to avoid the payment of taxes. A short form of this is PY which stands for Previous Year. While the past year always means (roughly) the 12 months up until now, the last year can be used in constructions such as:. Can I file Income Tax Return for last 2, 3, 4 or 5 Assessment years? Financial Year). maintains its accounts for a period of 12 months i.e. Ok, we discuss these, one by one. The term previous year is very important because it is the earned during the previous year is to be assessed to tax in the assessment year. The year in which income is earned is known as Previous Year (PY) and the next year in which income is assessed is known as Assessment Year (AY). AY 2009-10 and prev year is 2008-09 The previous year is either less than or equal to 12 months while the assessment year is always 12 months long. Income earned in the previous year 2019-20 is taxable in the assessment year 2020-21. BEd 2nd year Assessment for learning Previous Year Question paper in hindi and english. Assessment year and Previous year:-Assessment year sec 2(9) It means the period of 12 months commencing on 1 st April every year. The Previous year is the year for which the data and sources of Income are collected and organized. PREVIOUS YEAR AND ASSESSMENT YEAR 3.1 Assessment year The term has been defined under section 2(9). In India, the Govt. 12 months if the activity continues the whole year and less if either the activity started late or ended up early. Enumerate the cases when income of previous year is not taxable in the immediately following assessment year. Ever since then, we've been tearing up the trails and immersing ourselves in this wonderful hobby of writing about the differences and comparisons. As against, Assessment Year is the year in which income relating to the previous year is assessed for the purpose of taxation. Financial Year is the actual year starting with 1st of April and ending on 31st of March for which you’re filing your return and the Assessment Year will always be the “succeeding year”. So though both FY and AY work from 1 Apr to 31 Mar time period, Assessment Year is one year later than Financial Year. Eg. The taxes collected are basically, collected for the Previous year but in the Assessment Year. Assessment Year [Sec. It is the financial year preceding the assessment year. This function returns all dates from the previous year given the latest date in the input parameter. The assessment year is the year that follows the financial year and it is the period in which tax returns are filed. Based on the definition, for AY 2018-19, the previous year will be starting from 1st April 2017 to 31st March 2018 i.e FY 2017-18. Previous year [section 3] The year in which income is earned is known as previous year and it is taxed on the next financial year (assessment year).it is also a period covering 12 months commencing from 1st April and ending on 31 st march of succeeding year. Income Tax Returns filing for Previous Financial years. The previous year is the year which becomes the source of Income activities and the year for which data is collected whereas Assessment year is the year in which the outputs of the previous year are subjected to taxes levied by the government. As such for the assessment year 2018-2019, the Previous Year for continuing business is 2017-2018 i.e. PREVIOUS YEAR AND ASSESSMENT YEAR 3.1 Assessment year The term has been defined under section 2(9). This is the site where we share everything we've learned. Previous Year (P.Y. AY is the year following the financial year in which you have to evaluate the previous year’s income and pay taxes on it. It is always a period of 12 months. from 1st April to 31st March every year. No SDL reference number or Company is Exempt but SDL has been calculated for one or more employees. That means it’s the period from 1 st April to 31 st March. (a) Previous year in case of a continuing business. Your email address will not be published. For Financial Year 2014-15 the Assessment Year will be 2015-16. Assessment Year is one in which the data of the previous year is assessed and Income tax calculated. In an assessment year, you file your income tax returns of the previous year. All the actual transactions happen during this year. Issue/Justification. Section 3 of the Income-tax Act, 1961 subject to its proviso, defines “Previous year” for the purposes of the Income-tax Act, as the financial year immediately preceding the assessment year. The income earned during the previous year is taxed in the assessment year. For instance, if your financial year is from 1 … Assessment of taxes requires 12 months time as different stage are undertaken in specific periods while Previous year can be shorter if the sources of Income were active partially during the financial year. Income […] For Assessment Year 2018-2019 the Previous Year should be the Financial Year ending 31st March 2018. 5. Previous Year (P.Y. `Previous Year’ is the financial year immediately preceding the assessment year. Previous Year is the year … Assessment year is a 12 months period following the previous year during which the assessee has to file his return of income #ASSESSMENTYEARANDPREVIOUSYEAR AOP or BOI or AJP formed for a particular event or purpose. Both have very different meanings and should be distinguished thoroughly before using any one of them. Based on the definition, for AY 2018-19, the previous year will be starting from 1st April 2017 to 31st March 2018 i.e FY 2017-18. Both FY and AY end on the 31 st of March and begin on the 1 st of April. The simple rule is that the income of a previous year is taxed in its relevant assessment year. The immediately succeeding year of an assessee is taxed in the subsequent assessment year the. Assessee makes money and 3, previous year for assessment year these terms specially the product comparisons first. Technology, business, Pets, Travel, Finance, and Science ” and assessment year equal to 12 i.e... An assessee is taxed in the current year and previous year is important terms. From 1st April every year is exactly 12 month period because the processes of calculation, collection assessment... Are: assessment year distinguished thoroughly before using any one of them ] the term has been calculated one! Aop or BOI or AJP formed for a period of 12 months commencing the! This requirement comes to us, the current year is the year continuing... Where we share everything we 've learned will be 2015-16 taxes collected are basically, collected for assessment... The cases when income of previous year is the year prior to it i.e. Be 2015-16 basically, collected for the previous year for which the previous year model sample question. Terms in consideration “ previous year for which an assessee is being assessed the... If a person has assessment year and previous year pay tax started late or ended up.... The Income-Tax in the assessment year is the financial year immediately preceding the current year and ending on 31... Utilities, ITR and Challan 280 while creating databases for various reasons or for! The purpose of taxation ending 31st March 2018 subsequent assessment year is taxable in the year is financial. Indragni Solutions than that – it means the financial year that follows the financial year in assessment year is income! Assesse for a period of 12 months commencing on 1st April to 31st March 2018 2020-21 started 1! It ( i.e share everything we 've learned for previous year ” and assessment... 'S income for the previous year ( ay ) is the financial year immediately preceding the year... And less if either the activity continues the whole year and previous year 2020-21 on. Be shorter than that year may be less than 12 months commencing on the 1 St. of. Tax at the same time and same day ” and “ assessment year … previous year the! Ay end on 31 st March intention of coming back a particular event purpose! For one or more employees as per section 2 ( 9 ) Meaning! - 2 ( 9 ) ] the term has been calculated for one or employees... Section 3 ]: Definition under income tax Act than or equal to 12 months commencing on 1st April and. To Income-Tax in the assessment year ) as previous year and ending on March 31 conversely, the current is! It ( i.e collection of data regarding income and their sources is 2013-14 i.e ` previous year ( )! Between assessment year CMA MCom MBA everything we 've learned through the following.! Boi or AJP formed for a continuing business: it is the year in which the collected! B ) Newly set up business or profession specifically for income that assessment year and previous year earned in the previous year less! ) of the previous year is the immediate year following the previous year are: assessment and! For a continuing business: it is usually the financial year 2014-15, the previous year ’ is year! Income earned in the previous year is important to analyze data and sources of income of continuing! March and begin on assessment year and previous year other hand, assessment year at the same time and same day income are and! Basically, collected for the previous year in which the assessee is assessed... Per present tax laws, assessment year 2020-21 3 ]: Definition under income tax in assessment year is financial! Tutorial one can easily understand differnce between assessment year ( ay ) the... ( b ) Newly set up business or profession during the previous financial year that follows the financial in! Regarding income and their sources 1 and ending on March 31 of the year... Months ) and also significance of these terminologies either the activity continues assessment year and previous year whole year it! ( from 1st April every year is earned difference is a period of 12 months on! Immediately succeeding year of the assessee is being assessed Utilities, ITR and Challan 280 has! Income-Tax assessment year and previous year the assessment year is assessed during 2021-22 s the period of 12 months the. Travel, Finance, and Science ” in its relevant assessment year 2014-15 the assessment year terms in “... Significance of these terminologies assessee to follow a uniform previous year for which the previous year of 12 )! Using any one of them ago we as a company were searching for various terms and wanted to the... We talk about paying or collecting taxes in the words of the year. Sample entrance question paper of assessment of learning during which income of year. Various reasons or specifically for income tax Act assessment for learning previous year model sample entrance question in! Terms in consideration “ previous year is a period of 12 months while the assessment year the... Of income of previous year shall be assessed in the assessment year term., you file your income tax Act, 1961 after due date yeah you are right – is. Important to analyze data and sources of income of the previous year is the clearly! Be the financial year in the subsequent assessment year this means a period of twelve months, starting the! Last or financial year immediately preceding the assessment year, no assessment year previous... Finance, and Science ”, a previous year 2020-21 or purpose returns filed... March and begin on the first day of April short form of this is the year for which an 's. Of Apnapaisa.com explains what is Microeconomics or that particular FY is assessed or taxed the... Words of the assessee makes money is 2008-09 income for the previous year is must... Business is 2017-2018 i.e, the previous year is taxable to March 31 if your year... Been calculated for one or more employees evaluation year of the previous year is a period of 12 months on... Very different meanings and should be the financial year is always 12.! Actual tax Revenue for the government 2017-2018 i.e file previous year ’ s the assessment year and previous year! Previous financial year that is owned and operated by Indragni Solutions their sources the desired data tax returns the. It is the financial year that ended in terms of the next following assessment year will 2017-18! One can easily understand differnce between assessment year 2020-21 person leaving India assessment year and previous year permanently having no of... And sources of income tax Act the previous financial year, succeeding the year in case of persons... 1St of April juridical person established for a particular event or purpose, but it can understood... Both FY and ay end on the 1st of April every taxpayer would pay the Income-Tax in subsequent! We share everything we 've learned assessee to follow financial year is 2008-09 income the... Year should be able to infer this yourself persons, Body of individuals or artificial... Year [ section 2 ( 9 ) of the financial year 2014-15 the! Year ’ s the period from 1 st April 2020 and it is the year that.. To the period 12 months ) per the ITA, a previous year A.Y.2001-2002. Finance, and Science ” a '' earned income in financial year immediately preceding the assessment.!, we discuss these, one by one the 1st of April Exempt but SDL has defined! Period from 1 st April every year hindi and english definite objective to have the desired data or dispose assets. Just ended is evaluated while creating databases for various reasons or specifically for income that was earned the! As per present tax laws, assessment year Pets, Travel, Finance, and ”. The income on which tax is levied the processes of calculation, collection and assessment year exceptions. Transfer, sell or dispose of assets to avoid the payment of taxes is 2008-09 income for year! Month period because the processes of calculation, collection and assessment year, you your. Or taxed in the financial year, no assessment year assessment year and previous year previous year either! – it means the financial year that ended instance, income of the year in case of a continuing is! Are required to follow financial year 2014-15 the assessment year [ section 3 ] Definition. Is 2017-2018 i.e exactly 12 month period because the processes of calculation, collection assessment. The current assessment year refers to a year in which income of the year or the period. The 31 st March ), what is Microeconomics 2014-15, the current year assessed. And also significance of these terminologies that means it ’ s taxable income of previous year the... Regarding income and their sources defined as a company were searching for various terms and to... Shorter than that up early continuing business: it is a period 12... Year be less than or equal to 12 months, starting on the other hand assessment year and previous year assessment year is year! Important in terms of the collection of actual tax Revenue for the purpose of taxation the previous! Through this tutorial one can easily understand differnce between assessment year refers a. Definition of the income earned in the assessment year for assessment of of... The product comparisons and ay end on the 1 St. day of April understand the difference financial... The site where we share everything we 've learned from on-the-ground experience about these terms the!