Definitions under Income Tax Act
What is Assessment year?
Assessment year is the year in which the income of the previous year is to be assessed. In other words assessment year is the succeeding year of the year whose income is to be taxed. For example if we are calculating taxable salary which is received in year 2015-16 then the assessment year is 2016-17. In short it is written as A.Y or AY.
What is Previous year?
Previous year is the year for which we are calculating the income tax. For example are calculating taxable salary received in year 2015-16 then the year 2015-16 is the previous year and assessment year is 2016-17 for this. In short it is written as P.Y or PY.
Who is assessee?
Assessee means a person by whom income-tax is payable under the act. It may be an individual or an artificial person.
Hindu Undivided Family (HUF)
Firm (Partnership firm)
Association of persons (AOP)
Body of Individuals (BOI)
Any other artificial judicial person
An individual doing business as sole proprietor is not a separate assessee. It is assessed as an individual only even if a person does many businesses with different names.