AY is assessment year and FY is financial year. Everyone knows this. But when most taxpayers have to e-file their income tax returns or pay taxes, they grapple with the issue of which year to enter in the AY column and which to enter in the FY column. Let’s get this issue fixed from a taxation perspective.
A financial year is the year in which you earn an income. An assessment year is the year following the financial year in which you have to evaluate the previous year’s income and pay taxes on it.
Both AY and FY begin on the 1st of April and end on the 31st of March.
For example, if your financial year is from 1 April 2015 to 31 March 2016, then it is known as FY2015-16. The assessment year for income earned during this period would begin after the financial year ends–that is on 1 April 2016 till 31 March 2017. Hence, the assessment year would be AY2016-17.
Simply put, the assessment year begins after the financial year ends. So, if you’re looking to e-file returns for your income between 1 April 2015 and 31 March 2016, which is FY2015-16, you need to select AY2016-17 while e-filing your income tax returns.
The following are the financial year and assessment years for the past three years
|Dates||Financial year||Assessment year|
|1 April 2013 to 31 March 2014||2013-14||2014-15|
|1 April 2014 to 31 March 2015||2014-15||2015-16|
|1 April 2015 to 31 March 2016||2015-16||2016-17|