Financial Year vs Assessment Year — FY 2025-26, AY 2026-27
Updated: 3 June 2026 | Income Tax Reference | AY 2026-27 ITR Guide
Financial Year (FY) = the year you earn income (1 April to 31 March). Assessment Year (AY) = the next year when you file ITR for that income = FY + 1. Current: FY 2025-26 = AY 2026-27. ITR for FY 2025-26 must be filed by 31 July 2026. Always select AY 2026-27 when filing for current year's income.
Current Financial Year
FY 2025-26
1 April 2025 — 31 March 2026
Year when income is EARNED
Year when income is EARNED
Current Assessment Year
AY 2026-27
1 April 2026 — 31 March 2027
Year when ITR is FILED & ASSESSED
Year when ITR is FILED & ASSESSED
31 Jul 2026
ITR filing deadline for AY 2026-27 (FY 2025-26) for individuals without audit.
With audit: 31 October 2026. Always select AY 2026-27 when filing for income earned in FY 2025-26.
With audit: 31 October 2026. Always select AY 2026-27 when filing for income earned in FY 2025-26.
FY vs AY — Complete Reference Table
| Financial Year | Assessment Year | ITR Due Date | Income Tax Slabs |
|---|---|---|---|
| FY 2025-26 (Current) | AY 2026-27 | 31 July 2026 | New regime: 0-4L nil, 4-8L 5%... |
| FY 2024-25 | AY 2025-26 | 31 July 2025 (passed) | New regime: 0-3L nil, 3-7L 5%... |
| FY 2023-24 | AY 2024-25 | 31 July 2024 (passed) | New regime default; 87A ₹25K |
| FY 2022-23 | AY 2023-24 | 31 July 2023 (passed) | New regime optional |
| FY 2021-22 | AY 2022-23 | 31 July 2022 (passed) | Old/new regime choice |
When to Use FY vs AY
| Situation | Use | Example |
|---|---|---|
| Filing ITR on portal | Select AY | For FY 2025-26 income → select AY 2026-27 |
| Advance tax installments | Paid during FY | Pay in FY 2025-26 (Jun/Sep/Dec/Mar 2026) |
| Challan 280 (self-assessment tax) | Select AY | Paying tax for FY 2025-26 → AY 2026-27 |
| Form 26AS / TDS certificate | Shows AY | TDS deducted in FY 2025-26 → AY 2026-27 |
| Income Tax Notice | Shows AY | Notice for AY 2024-25 = about FY 2023-24 income |
| Bank statements / salary slip | FY | "FY 2025-26 salary" = income Apr 2025–Mar 2026 |
Frequently Asked Questions
What is Financial Year (FY) and Assessment Year (AY)?
Financial Year (FY) = the year in which you EARN income. It runs from 1 April to 31 March. Assessment Year (AY) = the year in which you FILE tax return for that income = FY + 1 year. Example: Income earned April 2025 to March 2026 → FY 2025-26 → AY 2026-27. ITR for FY 2025-26 (AY 2026-27) must be filed by 31 July 2026 (for individuals without audit). Always check carefully — selecting the wrong AY when filing ITR is one of the most common errors.
What is the current Financial Year and Assessment Year?
Current Financial Year (2025-26): 1 April 2025 to 31 March 2026. Current Assessment Year (2026-27): 1 April 2026 to 31 March 2027. ITR filing for FY 2025-26 opens from May/June 2026. Due date for filing ITR (non-audit individuals): 31 July 2026. If you are filing your ITR now (in 2026), select AY 2026-27. If you are filing for last year's income (FY 2024-25), select AY 2025-26 (belated/revised return if within window).
Why is there a difference of 1 year between FY and AY?
The 1-year gap exists because income tax is assessed AFTER the financial year ends. You earn income throughout FY 2025-26 (Apr 2025-Mar 2026). After March 31, 2026, you compute your total income, deductions, and tax liability for that year. You then file the Income Tax Return (ITR) in AY 2026-27 (April–July 2026). The Income Tax Department "assesses" (examines and processes) your return during AY 2026-27 — hence it is called the Assessment Year. This is an administrative convention under the Income-tax Act.
What AY should I select when filing ITR online?
Select the AY that corresponds to the income year you are filing for: For salary/income earned April 2025-March 2026 → select AY 2026-27. For salary/income earned April 2024-March 2025 (filing late) → select AY 2025-26. Common mistake: If you earned income in FY 2025-26 and accidentally select AY 2025-26, your return will be filed for the wrong year. The system will show a mismatch when Form 26AS is checked. If you filed for the wrong AY: contact income tax helpline (1800-103-0025) or submit grievance on portal to get it corrected.
What is Previous Year in income tax?
Previous Year (PY) is the official income tax terminology for what is commonly called Financial Year. Section 3 of the Income-tax Act 2025 defines "previous year" as the financial year immediately preceding the assessment year. So: Previous Year 2025-26 = Financial Year 2025-26 = income earned Apr 2025–Mar 2026. You may see "Previous Year" terminology in older tax forms, IT Act provisions, and legal documents. Both FY and PY refer to the same period — the year in which income was earned.
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