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Assessment Year (AY 2026-27) is replaced by Tax Year (Tax Year 2025-26) from April 1, 2026. Historical comparisons, correction statements, and ITR forms need consistent labelling across both conventions without confusing which period is being compared.
Maintain a mapping table converting every AY label to its Tax Year equivalent. Tag every reconciliation record with both labels during the cross-over period to support historical lookups. Validate trend reports to confirm the same period is compared across both labels.
Tax Year used for new filings from April 1, 2026 onwards across ITR, TDS returns, and certificates. Assessment Year retained for any correction statement or appeal that references a pre-2026 period.
Period-consistent trend reports, correctly labelled historical comparisons, and ITR-ready period references that prevent two different periods being treated as the same.
If your finance team has spent two decades speaking in the language of Financial Year and Assessment Year, the Income Tax Act 2025 asks you to unlearn one of the two. From April 1, 2026, Assessment Year disappears from the tax vocabulary. Every filing, certificate, and portal field uses a single new label: Tax Year. The shift is small in concept but touches every reconciliation report, audit working paper, and ERP configuration that references a fiscal period.
What Tax Year Is
Under the Income Tax Act 2025, Tax Year is the twelve-month period during which income is earned and taxed. It runs from April 1 to March 31, unchanged from the existing Financial Year calendar. The new act collapses the two-label system — Financial Year and Assessment Year — into one. The period in which income is earned and the period in which it is assessed are now referred to by the same label.
For example, income earned during April 1, 2025 to March 31, 2026 was previously described as Financial Year 2025-26 (when earned) or Assessment Year 2026-27 (when filed). Under the new act, it is simply Tax Year 2025-26.
The Mapping Rule
From Financial Year to Tax Year
The conversion is direct. Financial Year 2025-26 equals Tax Year 2025-26. Finance teams that already speak in Financial Year labels can carry the same number forward — only the word before the year changes.
From Assessment Year to Tax Year
Assessment Year is the trickier mapping because it was one year ahead of the Financial Year. Assessment Year 2026-27 maps to Tax Year 2025-26 (both describe income earned in FY 2025-26). Assessment Year 2025-26 maps to Tax Year 2024-25. A safe formula: subtract one from the higher year in the Assessment Year range, and the result is the Tax Year equivalent.
Cross-over period handling
During FY 2026-27, a finance team will see Assessment Year labels on pre-2026 records (Form 26AS downloads, old ITR acknowledgements, legacy correction statements) and Tax Year labels on new records (Form 168, Form 131, Form 141, new ITR filings). Systems must hold both labels side by side for at least two years.
Tax Year Mapping Reference Table
| Period of income | Old Financial Year | Old Assessment Year | New Tax Year |
|---|---|---|---|
| April 2024 to March 2025 | FY 2024-25 | AY 2025-26 | Tax Year 2024-25 |
| April 2025 to March 2026 | FY 2025-26 | AY 2026-27 | Tax Year 2025-26 |
| April 2026 to March 2027 | FY 2026-27 | AY 2027-28 | Tax Year 2026-27 |
| April 2027 to March 2028 | FY 2027-28 | AY 2028-29 | Tax Year 2027-28 |
India-Specific Reconciliation Impact
Indian finance teams run several workflows that depend on the period label. The income tax return draws TDS credit from Form 26AS (pre-2026, keyed by AY) or Form 168 (post-2026, keyed by Tax Year). Audit working papers match the TDS receivable ledger to Form 26AS or Form 168 entries for a specific period. Trend dashboards compare GSTR-3B output tax across multiple periods. Each of these breaks silently if the system is not told that AY 2026-27 and Tax Year 2025-26 are the same twelve-month window.
The operational fix is a mapping table in the ERP or reconciliation tool that holds both labels against every record. A TDS reconciliation software that supports dual labelling presents the user with Tax Year for new entries and Assessment Year for legacy queries, without asking the finance team to do the mental translation each time. A broader reconciliation software India platform keeps the dual-labelling consistent across TDS, GST, and bank reconciliation modules, so a single exception report can reference records from both era. The authoritative reference for Tax Year terminology is the Income Tax India e-filing portal.
The FAQs below cover the most common questions finance teams ask about the Tax Year change and the mapping to older data.