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

Under the Indian income tax framework, the 'previous year' for a person who starts a new business on 10 August 2025 and the corresponding 'assessment year' are, respectively:

The previous year is 10 August 2025 to 31 March 2026, because for a new business it starts on the date of setting up and ends on the following 31 March. The income is assessed in assessment year 2026-27.

  1. APrevious year 1 April 2025 to 31 March 2026; assessment year 2026-27
  2. B10 August 2025 to 31 March 2026; assessment year 2026-27Correct
  3. C10 August 2025 to 9 August 2026; assessment year 2027-28
  4. D10 August 2025 to 31 March 2026; assessment year 2025-26

Explanation

For a newly set-up business the previous year runs from the date of setting up to the next 31 March, so it is 10 August 2025 to 31 March 2026. Income of that year is assessed in the following assessment year, 2026-27. The option with the full April-March year ignores the starting date, and the 12-month period from the start date is not how the previous year is defined.

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