Differences Between a Fiscal and Financial Year

What is the difference between a fiscal year and a financial year?

 Fiscal Year Overview

According to the Internal Revenue Service, IRS, a calendar year is a period of 12 months, which begin on January 1 and end on December 31. A fiscal year also contains 12 consecutive months, but can end on the last day of any month, with the exception of December.

Example: January 2019 to December 2019 called Fiscal year 2019.

What is Financial Year?

A Financial Year (FY) is the period between 1 April and 31 March – the year in which you earn an income.

Example: 1 April 2019 to 31 march 2020 called Financial year 2020.

What is Assessment Year?

The assessment year (AY) is the year that comes after the FY. This is the time in which the income earned during FY is assessed and taxed. Both FY and AY start on 1 April and end on 31 March. For instance, FY 2019-20 and AY 2020-21 are one and the same.

Assessment year and Financial Year for recent years

Calendar year

Twelve-month period starting with January 1 and ending with December 31, and which has 365 days in non leap years and 366 days in a leap year. Also called civil year.

Accounting year

An accounting year is a period of time, usually 12, during which businesses calculate their accounts and organize their financial activities. The accounting year, also known as the accounting period, occurs usually on any date other than January 1st to December 31st.