Question

what is the difference between financial year and assessment year or accounting year?

Answer 1

Accounting year is the assessment year and financial year is the financial year. From an income tax perspective, financial year is the year in which you earn an income. Accounting year is the year following the financial year in which you have to evaluate the previous year’s income and pay taxes on it.

For instance, if your financial year is from 1 April 2018 to 31 March 2019, then it is known as financial year 2018-19. The assessment year for income earned during this period would begin after the financial year ends –that is from 1 April 2019 till 31 March 2020. Hence, the assessment year would be accounting year 2019-20.