Financial year (FY)

A financial year, often shortened to FY, is the 12 month period a country uses for money and tax. In India it runs from 1 April to 31 March. So FY25 is the year from April 2024 to March 2025, FY26 is April 2025 to March 2026, and FY27 is April 2026 to March 2027. News reports and government data usually count money over a financial year, not a calendar year.

Why the number names the year it ends in

The shorthand can confuse, because FY25 is mostly made up of 2024. The convention is that the number names the calendar year the period ends in. FY25 ends on 31 March 2025, so it is “25”, even though it begins in April 2024. When in doubt, read FY25 as “the year ending March 2025”.

Financial year versus assessment year

Two terms sit close together at tax time. The financial year is the year you earn the income. The assessment year, or AY, is the following year, when you file and are taxed on that income. So income earned in FY25 (April 2024 to March 2025) is filed in AY 2025-26. Deadlines, tax regime choices and section 80C limits all run on the financial year, so it is worth knowing which one you are in.

Why it matters for your money

Most tax deadlines, investment limits and interest calculations reset on 1 April. A tax-saving investment counts for the financial year you make it in, and your capital gains are totted up over the same April-to-March window. Lining your planning up with the financial year, rather than the calendar year, keeps you on the right side of deadlines.