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Previous Year is a financial term used in the context of Income Tax filing. As you know, all Income Tax calculations in India go by the Financial Year (FY), which stretches from 1 April of one year, to 31 March of the next. The filing of returns for this Financial Year happens in the next year, which is called the Assessment Year. Thus, while filing, the Financial Year for which returns are filed, is sometimes called Previous Year.
For example: you are filing returns on 20 July 2013 for income earned between 1 April 2012 and 31 March 2013. The year 2012-13, where the income was earned, is called Previous Year. The year in which you are filing returns (2013-14) is called Assessment Year.