Do you know the difference between financial year and assessment year? Or gross total income and total income? There are many such tax related terms like these that are not easily understood by lay taxpayers. While filing your income tax return (ITR) when you come across such confusing terms, it can put you in a fix and you might end up making a mistake that can cost you dearly. Here are five such pairs of ITR terms explained.

Financial year vs Assessment year
Financial year: For tax purposes, financial year (FY) is the year in which you earn your income and also pay your taxes on this earned income. A financial year starts on 1 April and ends on 31 March. So, if you have worked and earned income in 2017-18, it will be considered the financial year.

Assessment year: On the other hand, assessment year (AY) is the year following the financial year, in which your income is assessed. This also lasts from 1 April to 31 March and is the year in which you file your income tax returns for the taxes paid in the relevant financial year. In the above example, if 2017-18 is the financial year, 2018-19 will be regarded as assessment year.

Advance tax vs Self-assessment tax
Advance tax: If you are a salaried taxpayer with other sources of income, like interest income, and your tax liability for the financial year exceeds Rs 10,000 after accounting for the tax deducted by employer (TDS), you will have to pay advance tax. This has to be paid in the financial year preceding the assessment year in three instalments. The due dates are 15 September, 15 December and 15 March, and the penalty for not ..

Self-assessment tax: While calculating your tax liability, if you realise that some tax is due after taking into account the TDS and advance tax, then you pay self-assessment tax. This tax is paid in the assessment year before filing the returns. You need to fill a tax challan, ITNS 280, and can do it at specified bank branches or online.

Tax deducted at source vs Total tax
Tax deducted at source: This is the tax that is deducted from your income at the source of that particular income, be it by your employer on salary, or by the bank on deposits. The rate of deduction may vary for different sources and types of incomes. The TDS, however, may not be the total tax that you are liable to pay since you may have other sources of income which invite a higher tax.

This is the total tax that you pay on your entire income received from all sources and could be more than the tax deducted at source by your employer or other income sources. This means that TDS will not take care of your entire tax liability and you will have to pay this additional tax as self-assessment or advance tax before filing the returns.

Gross total income vs Total income
For salaried individuals, Form 16 lists the total salary received and the taxable income arrived at after relevant exemptions and deductions.
Gross total income: This is a total of all forms of incomes, including income from salary, property, business or profession, profits or gains, and other sources like interest, etc. From salary, the exempt allowances under Section 10, such as conveyance, LTA, and HRA, are deducted, and other incomes added, to arrive at the gross total income.
Total income: This is the income arrived at after deductions under Chapter VI-A, which includes Sections from 80C to 80U. The final figure arrived at is subject to tax. This is also known as the total taxable income.