Assessment Year and Previous Year

ASSESSMENT YEAR (Section 2(9))

The term has been defined under section 2(9). This means a period of 12 months commencing on 1st April every year. The year in which income is earned is the previous year and such income is taxable in the immediately following year which  is the assessment year. Income earned in the previous year 2019-20 is taxable  in the assessment year 2020-21.

Assessment year means the period starting from April 1 and ending on March 31 of the next year.

Previous year

 The financial year immediately preceding the assessment year. As mentioned earlier, the income earned during the previous year is taxable in the assessment year.