Year of Assessment (AY)

Year of Assessment (AY) – The Year of Assessment is the 12-month period immediately following the financial year in which the income earned is evaluated, assessed, and taxed by the Income Tax Department. During this year, taxpayers file their income tax returns, declare income earned in the previous financial year, and pay any remaining tax dues or claim refunds. In India, the financial year runs from 1st April to 31st March, and the assessment year starts right after it. Thus, income earned during one financial year is assessed in the subsequent year, known as the Assessment Year (AY).

Example: Income earned during FY 2024–25 (1 April 2024 to 31 March 2025) is assessed and taxed in AY 2025–26.