The Income Tax Bill 2025 introduces the term ‘Tax Year’ to replace the confusing ‘Assessment Year’ (AY), ‘Financial Year’ (FY), ‘Previous Year’ (PY), terminology.
The introduction of the ‘Tax Year’ concept is a significant step towards simplifying India’s tax system, making it more user-friendly and aligned with international standards.
This change is expected to come into effect from April 1, 2026, and will apply to all taxpayers, including individuals and businesses.