Assessment year and previous year – How Income tax is charged to tax

What is Assessment year and previous yearIncome is taxable on the net income that is earned during the previous year (PY). It is assessed in the immediately succeeding financial year which is called an assessment year (AY). All assessees are required to follow a uniform PY.

AY means the period 12 months commencing on the first day of April. That means it’s the period from 1st April to 31st march.

PY means the financial year immediately preceding the AY.

Your income generated from 1st of April 2012 to 31st march 2013 will be assessed to tax in the period that starts from 1st of April 2013 to 31st March 2014. In this case the period that starts from 1st of April 2012 to 31st march 2013 is called PY and the period that starts from 1st April 2013 to 31st march 2014 is called AY.

4 thoughts on “Assessment year and previous year – How Income tax is charged to tax

  1. Bineet

    1. I got interest on ppf credited on 31 March 2013, So i will declare it in ITR of Assessment year 2013-2014, given the fact that Previous year in which this interest was credited is 2012-2013(1 April 2012-31March 2013) ??

    2. I got interest on saving account credited in my Account on 30 June 2012 and 31 Dec 2012. So i will declare it in AY 2013-2014 ?

    I am filing a revise return. Kindly help

    Reply
    1. YFB

      Interest on PPF is exempted from tax… what you are exactly doing… are you declaring it as exempted income in tax computation statement?
      Interest on saving account received from 1st april to 31st march will be charged to tax.
      Why you want to revise your IT return?

      Reply
  2. kusma patnaik

    Sir,
    In April,2015 I will submit Form-15G to the bank to avoid TDS. In the ”Declaration / Verification” which year to be mentioned in” for the previous year ending on …. relevant to the Assessment year …. will be nil. I/we also,declare … previous year ending on …. assessment year …..will not exceed … incometax.”

    Reply

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