Assessment Year is the year that comes right after the financial year (FY). Both financial year (FY) and assessment year (AY) starts on 1st April and ends on 31st March. Assessment year is the period in which income earned during a particular financial year is taxed and assessed. For example; considering the current scenario; for the period 1st April 2020 to 31st March 2021, the assessment year will be the next one that is from 1st April 2021 to 31st March 2022.
What are the difference between the assessment year (AY) and financial year (FY)?
As per the income tax point of view, the financial year is the year when you actually work and earn an income, and the assessment year is the year when this particular income is evaluated and your tax is paid.
Few points to keep in mind while filing tax during an assessment year (AY)
- Documents of the financial year (FY) are used in the assessment year (AY) to evaluate the income.
- Documents which are required; Form 26AS of FY and previous year’s tax return.
- Fill in the details accurately.
- Keep the documents ready.
- Disclose Exempt income.
- Details of your assets and liabilities.