Tax Year

Under India's Income-tax Act, 2025, the single twelve-month period, 1 April to 31 March, in which income is both earned and counted for tax. It replaces the old pair of a previous year (when you earned) and an assessment year (when it was assessed).

Why it matters

It removes a long-standing source of confusion in Indian tax filing, where income for FY 2025-26 was filed as AY 2026-27. Tax year 2026-27, which began on 1 April 2026, is the first one under the new Act; earlier years keep the old labels.

For example

Instead of saying a startup's income for FY 2026-27 is assessed in AY 2027-28, its CA now calls it tax year 2026-27, with the return due in 2027.

Go deeper

Income Tax Act 2025: Shift from Assessment Year to Tax Year TaxGuru · article A chartered accountant's explainer of the tax year under the Income-tax Act, 2025, with the transition from FY and AY set out year by year. Open taxguru.in →

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