Income 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 taxpayers are required to follow a uniform Previous Year.
As per present tax laws, Assessment Year means the period 12 months commencing on the first day of April. That means it’s the period from 1st April to 31st March.
Previous Year means the financial year immediately preceding the Assessment Year.
Your income generated from the 1st of April 2019 to 31st March 2020 will be assessed to tax in the period that starts from 1st of April 2020 to 31st March 2021. In this case, the period that starts from 1st of April 2019 to 31st march 2020 is called the Previous Year and the period that starts from 1st April 2020 to 31st march 2021 is called Assessment Year.