TaxFinancial Glossary
Assessment Year
Definition
The year in which income earned during the preceding financial year is assessed and taxed. For income earned in FY 2025-26 (April 2025 to March 2026), the assessment year is AY 2026-27. You file your income tax return for the assessment year, reporting income of the financial year.
Why It Matters
Confusion between financial year and assessment year is the most common error in Indian tax filing. ITR forms, tax challans, and advance tax payments all reference the assessment year. Filing under the wrong AY can lead to mismatched records, delayed refunds, and unnecessary notices from the tax department.