HR Glossary
Assessment Year (AY)
The year following the financial year in which income is assessed and taxed by the tax authorities.
Definition
The Assessment Year is the 12-month period immediately after a given Financial Year, during which the income earned in that financial year is evaluated and taxed. For example, income earned in FY 2025-26 is assessed in AY 2026-27.
Why It Matters
Payroll and tax filing calendars are built around the distinction between the financial year and the assessment year.