what is financial year and assessment year? why financial year started from April 1st only?

Financial year is the Year in which a person has earned his income. In
simple terms, if you have been employed from 01st of April 2011 to
31st of March 2012, then this period is termed as your Financial Year.

Assessment year is the year in which you file your returns for the
Income earned for the financial year, which had just ended.
For example if you are filing income tax returns in July 2012, then
you would be filing returns for Financial Year 2011 – 2012 & this is
what is called Assessment Year.

These are the reasons why financial year starts in April in India.
The Indian Constitution had empowered only the central government to
levy and collect income-tax. The Income-Tax Act was enacted in 1961.
The Act came into force from April 1, 1962 and that's why our
financial year begins on April 1 every year.

1. Harvesting season starts in April. Being an agricultural country,
money starts flowing into the hands of agriculturists and related
marketeers only in April.
2. Almost in all parts of India, regional new year falls around 13th
or 14th April. That is why the Govt. fixed 1st of April as new
financial year.
3. Until a decade ago, incometax assessees and companies were
permitted to have a date of their choice as the beginning of financial
year. To attain uniformity, now all companies and individuals follow
1st April as beginning of financial year.

There are a lot of countries where the financial year is from April to
March. Some examples are:
Canada
United Kingdom (UK)
New Zealand
Hong Kong
Japan