An increasing number of taxpayers choose to file their income tax returns on their own. Therefore it is very important to understand the difference between the financial year and assessment year.
The Financial Year (FY) is the year in which you earn the income. It is the year that starts from 1st April and ends on 31st March.
The Assessment Year (AY) is the year immediately following the Financial year in which the previous year’s income is evaluated. This is done to to compute the taxes on it. AY is the year in which income tax returns are filed for income that was earned in the previous Financial Year that ended.
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.
After having earned a particular income there comes a time when there is the need to file the income tax return. Then both of the above terms come into relevance. Though both terms are closely related to one another, yet they are quite different from one another.
For any help on ITR Filing feel free to consult the tax experts at LegalRaasta. You can file ITR yourself via our ITR software or get CA’s help on filing income tax return. You can also use the option of Business Return, Bulk Return or Revised Return Filing.