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Sunday, July 24, 2011

What are FY, AY, CY and PY?

FY (Financial Year), also known as the fiscal year, is the period for which annual financial computations are done for individuals, businesses and organizations.
Financial year may be varying between business to business or country to country.
In India, financial year begins on 1st April and ends on 31st March. Apart from India, Canada, Japan and Hong Kong too have same fiscal year.
CY is the calendar year; it starts on 1st   January and ends on 31st December. Many countries and companies have fiscal year same as the Calendar Year.
Countries like China, Germany and Russia have same fiscal and Calendar Year.
Some countries have altogether different Financial Year, for example in USA; FY begins on 1st October and ends on 30th September.
Representation of fiscal year could be confusing for countries and businesses having fiscal year other than the Calendar Year.
For India and other countries with same fiscal year, FY 11 means the Financial Year 2010-2011 that means fiscal year starting from 1st April 2010 and ending on 31st March 2011.
AY (Assessment Year) is the following year to the Financial Year. AY is used mainly in IT (income tax) matters.
In the assessment year, we file the income tax return for the past Financial Year.
Let us understand the subject with an example
In India, 31st July is the last date for filing the IT returns for individuals, so AY 12 (AY 2011-2012) is the Assessment Year, and we shall file the return for FY 11 (FY 2010-2011) before the aforesaid due date.
PY (previous years) is a year previous to the AY, it is just another name of the FY.
In the above example FY 11, is the Previous Year, same as the financial year.

1 Comments:

Tanay Agarwal said...

All these years, I was always confused. Finally all my doubts are cleared and that too so easily.

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