What is Assessment Year (AY)?#
The Assessment Year (AY) is the year immediately following the financial year in which you earned income. It is the period during which the Income Tax Department assesses (reviews and calculates) the tax on your income.
Example: If you earned income between April 1, 2025 and March 31, 2026, that is the Financial Year (FY) 2025-26. The tax on this income is filed and assessed in AY 2026-27 (April 1, 2026 to March 31, 2027).
Assessment Year vs Financial Year#
| Concept | Period | Purpose |
|---|---|---|
| Financial Year (FY) | April 1 to March 31 | Period when income is earned |
| Assessment Year (AY) | April 1 to March 31 (next year) | Period when income is assessed and tax is filed |
Why Assessment Year Matters#
- ITR Filing: You must select the correct AY when filing your Income Tax Return. Filing under the wrong AY is a common mistake.
- TDS Certificates: Form 16 and other TDS certificates are issued for a specific AY.
- Notices: IT notices always reference the AY being assessed.
- Refunds: Refund claims and adjustments are tracked by AY.
Current Assessment Year#
The ITR filing deadline for AY 2026-27 (income earned in FY 2025-26) is July 31, 2026 for non-audit cases.
Common Mistake to Avoid#
When filing your return, always double-check which AY you've selected in the portal. Selecting AY 2025-26 instead of AY 2026-27 means you're amending a prior year's return — a very common (and costly) error.