what is previous year in income tax

In the context of income tax, the previous year is the year in which income is earned, and it is the year immediately preceding the assessment year. The financial year, which starts on April 1 and ends on March 31 of the next year, is considered the previous year for all types of incomes. For example, if the assessment year is 2023-2024, the previous year in income tax would be 2022-2023, which is the salary earned between the period of April 1, 2022, and March 31, 2023. If a business is newly set up, the previous year might be less than 12 months, but the next financial year will be the entire 12 months (April to March) . The assessment year is the year in which the income earned in the previous year is assessed by the Income Tax authorities.