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Sunday, 16 April 2017

Meaning of Assessment Year (A.Y.) & Previous Year (P.Y.)

Assessment year is the Financial year following the previous year. Assessment year is a twelve months period, commencing from 1st April every year.

Previous year is the Financial year immediately preceding the assessment year. Financial year ending on 31st March every year. Previous year means in which income has accrued or received.

Newly Set-Up Business or Profession, Previous year means Date of setting up the Business or Profession, as the case may be, the date on which newly income source come into existence & year ending on 31st March.

Income which is earned in Previous year is chargeable to Tax in the Assessment year.

For Eg- Mr A, earned an Income of Rs. 4,80,000 during the Previous year 2016-17, this income is chargeable to Tax in the Assessment year 2017-18. Hence, Assessment year is 2017-18 & relevant Previous year is 2016-17. 

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