Ans: Here are some of the essential terms about the income tax that every taxpayer should be aware of: • Financial year: The period between 1st April of the current year and 31st March of the following year is termed as a financial year.  • Assessment year: When earnings of a particular financial year are assessed in the following financial year, it is termed as an assessment year. • Deduction: A deduction is a certain reduction in your total taxable income based on various Sections of the Income Tax Act, 1961 such as 80C, 80E, 80G and others.