A financial year is a period when an individual earns income.
WHENEVER you go to a tax expert, chartered accountant (CA), or lawyer to file ITR, you must have found terms such as Financial Year (FY) and Assessment Year (AY) very confusing. If you are one of those people, this article is for you. In this article, we will tell our readers what is the difference between a Financial Year and an Assessment Year.
ITR stands for Income Tax Return. It is used by any person for his previous year’s financial transactions and tax deposits.
In India, tax is charged by the Income Tax Department on the income earned by any person in a year. The year for income tax calculation starts on April 1 and ends on March 31 of the next year. A financial year is a period when a person earns income.
The assessment year is the period during which you are paying income tax. For example, if you deposit your income tax by July 31, 2023, then your assessment year will be considered 2022-23. Usually, it is one year before the current financial year.
The year during which the income is earned is called the financial year. The assessment year is the year for which the return is filed. For example – a person named Shyam does a job and earns a total salary of 5 lakhs during 2022-23. In this situation, we will say that Shyam has earned five lakh rupees during the financial year 2022-23. On the other hand, if he pays tax on this on July 31, 2023, then it will be said that he is paying income tax for the assessment year 2022-23.
Jagran English brings you all the latest and breaking news from India and around the world. Get live English news from India, World, Politics, Entertainment, Lifestyle, Business, Education, Sports, Technology, and much more. Follow english.jagran.com to stay updated with the latest English news.
Copyright © 2023 Jagran Prakashan Limited.
