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NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Concepts in Taxation

Under the Income-tax Act, 1961 framework taught for NISM X-B, the 'previous year' for an assessee who starts a new business on 1 October 2024 is:

For a business started on 1 October 2024, the previous year runs from that date to 31 March 2025. The previous year for a new business begins on the date of setting up and ends on the next 31 March, so it is a shorter period.

  1. A1 October 2024 to 31 March 2025Correct
  2. B1 April 2024 to 31 March 2025
  3. C1 October 2024 to 30 September 2025
  4. D1 April 2025 to 31 March 2026

Explanation

The previous year is the financial year immediately preceding the assessment year, but for a newly set-up business it runs from the date of setting up to the following 31 March. So it is 1 October 2024 to 31 March 2025, and income is assessed in AY 2025-26. Option 2 wrongly assumes a full year.

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