The year of assessment refers to the year the contents of a report is based on.
In the personal finance industry, it almost exclusively refers to the year of assessment regarding income tax statements.
For example, a notice of assessment might be dated 2018, but the information contained in it reports on assessment made for the year 2017.
The year of assessment is therefore 2017.
Lenders and banks are particularly interested in the year of assessment as they require the most recent versions of tax statements to make qualified decisions on loan approvals and lending.
While it is not a required income document for borrowers who are employed, borrower might still submit them during mortgage applications so that annual bonuses are factored into the income-to-debt ratio so as to obtain a higher loan quantum.
It is not uncommon for a self-employed individual to be refused a mortgage should he or she be unable to produce income tax statements with a year of assessment indicating the year before. Especially when he is expected to have already received it from IRAS.
This is because self-employers basically only have the NOA as proof of income.
If there is a legitimate reason for delay, banks are known to wait for the document to be ready before proceeding with processing the loan.
