Assessment Year (AY) is the year in which a Financial Year’s income is assessed. A Financial Year cannot be assessed until it is complete. So, the Financial Year is assessed in the year following, and hence the year that follows a Financial Year is called the Assessment Year.
A Financial Year is a twelve month accounting period that a government or a business uses for financial and tax reporting purposes. A Financial Year may not be the calendar year, it’s different for different countries and businesses.
The Financial Year for Government of India starts on 1st April one year and ends on 31st March the following year.
For eg. Financial Year 2022-23 starts on April 1, 2022 and ends on March 31, 2023. The Assessment Year for this financial year is 2023-24 which starts on April 1, 2023 and ends on March 31, 2024.
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