While filing their returns on income, many individual taxpayers get confused between the financial year and the assessment year.
The lack of clarityresults in unnecessary mistakes while filling the income tax return forms,leading to several issues that are often faced by taxpayers.
This can be completely avoided if taxpayers know the clear difference between the financial year and the assessment year.
Income tax return forms have mentions of both financial year and assessment year.
Assessment year is simply the time during which the income earned in the financial year is assessed.This means that the assessment year is the year that comes right after the financial year.
For example, taking this year's deadline, the last datefor filing income tax returns for the fiscalyear 2019-20without any late fee was January 10, 2021.
However, all those taxpayers who have still not filed their returns on income can still do so by March 31, 2021.
However, while taxpayers are filing their income tax returns for the financial year 2019-20, but the assessment year is 2020-21.