Financial Year
Definition
The 12-month period used for accounting and tax purposes in India, running from April 1 to March 31. Income earned during a financial year is taxed and reported in the subsequent assessment year.
Why is Financial Year Important?
Navigating the Indian tax system requires a clear understanding of terms like Financial Year. With the introduction of the new income tax regime alongside the old one, taxpayers must evaluate their deductions, exemptions, and tax brackets carefully. This concept is a key component in optimizing your tax liabilities under the Income Tax Act and GST framework.
Proper tax planning using this metric can help individuals and businesses maximize their take-home income while remaining fully compliant with government regulations. We provide free tax calculators to help you estimate these figures accurately and make informed decisions before filing your returns.
What is a Financial Year?
A Financial Year (FY) in India runs from April 1 to March 31 of the following calendar year. It is the period for which income is earned, expenses are incurred, and financial statements are prepared. The corresponding Assessment Year (AY) is the year in which tax returns for that FY are filed.
FY vs. AY
| Concept | Period | Example |
|---|---|---|
| Financial Year | April 1 โ March 31 | FY 2024-25 (Apr 2024 โ Mar 2025) |
| Assessment Year | The year after FY | AY 2025-26 (Apr 2025 โ Mar 2026) |
Key Financial Year Dates
- April 1: New FY starts; choose tax regime (old/new)
- June 15: First advance tax instalment due
- July 31: ITR filing deadline (non-audit)
- October 31: ITR deadline for audit cases
- December 31: Belated/revised return deadline
- March 31: FY ends; last date for tax-saving investments under 80C