Assessment Year and Previous Year System in Income-tax Workings

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Section 3 of the Income-tax Act, 1961 subject to its proviso, defines “Previous year” for the purposes of the Income-tax Act, as the financial year immediately preceding the assessment year.

The assessees or the persons concerned, many a time, wrongly write or misunderstand the changes brought by the Finance Act due to the phenomenon of previous year/ assessment year, while, usually, both remain the same. This also, sometimes, causes practical problems in the workings of income-tax.

Therefore, the terms previous year and assessment year may be changed to only one i.e. assessment year ( consisting of financial year) as remains in other Government Departments.

About Akhilesh Kumar Sah

Akhilesh Kumar SahAkhilesh Kumar Sah is an Advocate, Author and Columnist, based in Faizabad (Uttar Pradesh). Has written 3 books on taxation. He is an Achiever with India Book of Records 2013; Limca Book of Records 2007, 08, 09, 10, 11, 12, 13; and, Limca-2015 Special Literature Edition.

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