The new 'Tax Year' — why the old confusion is gone

Under the old system, every taxpayer had to juggle two different years for the same income: the "Previous Year," when you actually earned the money, and the "Assessment Year," the following year, when you filed and it got assessed. It tripped up almost everyone new to filing, and it wasn't even that useful — the two years always ran exactly one apart.

From 1 April 2026, the Income Tax Act, 2025 replaces both terms with a single concept: the Tax Year. It's the same 1 April–31 March period you already know — just one name instead of two. If you earn income between 1 April 2026 and 31 March 2027, that's simply Tax Year 2026-27. There's no new filing deadline hidden in this, no new year-count to track.

Who this affects: everyone filing a return for income earned from 1 April 2026 onward. It does not touch your return for FY 2025-26 (filed by 31 July 2026), which is still governed by the old Act and still uses "Previous Year" and "Assessment Year" as before.

What to do: nothing to prepare for right now — this is a naming change, not a compliance task. From April 2026, if your bank, employer, or accounting software still shows "Assessment Year" on a form for income earned after that date, it just hasn't updated its terminology yet.