Under the old law, income earned in a financial year (FY), say FY 2025-26, was assessed in the next year, called the assessment year (AY 2026-27). The Income-tax Act, 2025, which applies from 1 April 2026, uses the simpler term “tax year” for the year in which income is earned. You will still see AY in many documents for a while.
Finance glossary
What is Tax year and assessment year?
The year whose income is taxed. Under the Income-tax Act, 2025, the old pair of "previous year" and "assessment year" is replaced by a single "tax year".