Assessment Year vs. Financial Year
✓ Last verified 14 Sep 2026
The short version
The financial year is when you actually earn the income (April to March); the assessment year is the following year, when that income is assessed and taxed - a distinction that trips up a lot of first-time filers.
Income earned between April 2026 and March 2027 falls in Financial Year (FY) 2026-27 - and gets assessed and taxed in the following year, Assessment Year (AY) 2027-28. Tax forms, deadlines, and slab rates are officially referenced by assessment year, which is why a return filed for AY 2027-28 is actually reporting income earned a year earlier, in FY 2026-27 - a source of genuine confusion for anyone filing their first return.
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