Indian income tax runs on April to March financial years, but newspapers talk about “Assessment Year 2026-27.” Mixing FY and AY causes wrong ITR selection and missed due dates. Five minutes with these definitions saves hours of confusion later.
- FY is generally 1 April to 31 March when you earn income.
- AY is the year in which that income is assessed and the return is usually filed.
- Previous year in legal language often means the same FY you are reporting.
- Always pick ITR utilities and tax calculators labelled for the correct AY.
Most individuals book salary, rent, and India-sourced interest on a cash or due basis within the FY window ending 31 March.
When you hear “FY 2025-26,” think: earnings mostly between April 2025 and March 2026. Your Form 16 and bank interest certificates should carry dates inside that span.
The assessment year follows the financial year: income of FY 2025-26 is normally assessed in AY 2026-27. ITR forms, e-filing utilities, and many notifications reference AY.
If you download the wrong utility version, you might apply wrong slab or rebate rules even though your numbers are right.
In statutory language, “previous year” is the year in which income is earned, the same FY for most salaried people.
When a notice says “previous year,” translate it to your FY on the calendar. Keeping a small cheat sheet on your desk prevents 90% of date mix-ups.
SalTax writes for salaried taxpayers and professionals in India who want clear explanations, not jargon. Our guides reflect how tax compliance works in practice, including payroll, Form 16, AIS, and filing, but they are educational only. They are not tax, legal, or investment advice. Rules, limits, and forms change with each Finance Act and assessment year. Always confirm the current year on the official Income Tax Department website (incometax.gov.in) and use a Chartered Accountant or qualified tax adviser for your own return, notices, or planning.