Income Tax
- Meaning of Assessment year and Previous year:
- Assessment year means a period of 12 months commencing from April 1st every year. The year in which tax is paid is called Assessment year
- While the year in respect of the income of which the tax is levied is called the previous year.
- Previous year means the period from establishing the business or profession to the end of March or the financial year immediately preceding the assessment year.
- The income earned in the previous year is taxed in the assessment year.
Eg. A is running a business from 2005 onwards. The previous year for the assessment year: 2012-13 is 01.04.2011 to 31.03.2012. - A an advocate sets up his profession on 1st sep, 2011. The previous year for the assessment year:2012-13 will be from 01.09.2011 to 31.03.2012.
