An assessment year begins immediately following the fiscal year. The assessment year assesses a taxpayer’s income and determines whether or not a tax liability exists. Throughout the assessment year, the money that you generated during the financial year under several types of income is taxed and assessed. Both financial year and assessment year begin on April 1st and finish on March 31st.
There is a clear difference between the financial year and the assessment year. A financial year is a year in which a person makes money for tax purposes. The assessment year is the year after the financial year in which the previous year’s income is assessed, tax is paid, and the ITR is submitted.
For example, the financial year beginning on April 1st, 2022, and ending on March 31st, 2023 is known as Financial Year 2022-23. The assessment year begins after the financial year finishes; therefore, AY 2023-24 would be the assessment year for FY 2022-23.