The previous year is the same as the Financial Year in which the income is earned. Tax is payable on the income earned during this Previous Year. And this tax is payable in Assessment Year, which is the year next to the Financial or Previous Year. For example, for the Income earned in Financial Year (Previous Year) April 1, 2019, to March 31, 2020, the liability to pay tax will fall in 2020-2021, known as the Assessment Year.