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Assessment year is a commonly used term by the Indian income tax department. If you have to file your income tax returns, either online or offline, or fill up any income tax form, you need to know the assessment year. In some countries, assessment year is also known as the tax year.
Assessment year is different from a financial year. Assessment year is the year following the financial year, and it is used for filing tax returns of a particular financial year.
Example 1: Financial year 2013-2014 starts from April 1st 2013 and ends on March 31st 2014. If you have to file your income tax return for FY 2013-14, you will be writing your assessment year as 2014-15.
Assessment year also begins on April 1st and March 31st, so assessment year 2014-15 begins from April 1st 2014 and ends on March 31st 2015.
Assessment year can be confusing at times because you won't see it on any of your financial documents. Whether it's your bank statements or salary slip or any other documents, they will all show the financial year.
Example 2: Suppose you want to file your returns for the financial year ending 31st March 2014. If any of your financial documents have year information, it will be financial year 2013-14. But, when you go to the income tax website you will be asked for an assessment year. A common mistake will be to assume the assessment year same as the financial year, but it is the year after the financial year.
Assessment Year 2015-16 will be used for filing returns of all income received between 1st April, 2014 and 31st March, 2015.
When filing taxes for any income earned between 1st April, 2012 and 31st March, 2013, you will have to use assessment year 2013-14 in your income tax forms.
You can try our tax calculator to calculate your tax liabilities.