Taxpayers with business income exceeding ₹1 crore in FY 2025-26 must make additional disclosures when filing their income tax returns before the August 31 deadline. According to reports from Mint, this mandate applies to both individual taxpayers and Hindu undivided families (HUFs) with income above the threshold. The tax department emphasizes that incorrect or incomplete disclosures can attract notices from the tax department. For AY 2026-27, the Income Tax Department has clarified that the year continues to be governed by the old Income Tax Act, 1961 despite the transition to the new tax law from April 1, 2026.
Schedule AL applies to individuals and HUFs who are required to file returns and whose total income exceeds ₹1 crore in the financial year. The schedule mandates disclosure of details related to assets and liabilities held at the end of the year. Taxpayers can make this disclosure in both ITR-2 and ITR-3, depending on their income profile and source of earnings. Companies filing ITR-6 are required to furnish details through Schedule AL-1 and Schedule AL-2.
According to Mint, Schedule AL requires reporting of various assets including immovable property such as land and buildings, movable assets including vehicles, jewellery, archaeological collections, shares, and securities. The assessee must also disclose cash in hand as on March 31, 2026, and other valuable possessions. Additionally, taxpayers must disclose liabilities related to these assets, including loans taken for property and loans taken for vehicle purchases.
As reported by Cleartax, taxpayers must disclose assets at cost plus any improvement costs incurred. Non-residents and not ordinarily resident individuals earning above ₹1 crore need to provide details of assets situated only in India. For assets received through gifts, wills, or other Section 49(1) modes, the cost must be declared as per the previous owner's cost plus improvement costs. If asset costs are not known and no wealth tax return was filed, the value can be estimated at circle rate or bullion rate as per the acquisition date.
The tax department states that this disclosure requirement is aimed at ensuring greater financial transparency and helping curb tax evasion. According to Mint, the mandate applies to taxpayers with income from business or profession, as well as those earning more than ₹1 crore through salary, capital gains, or other sources. Taxpayers filing before the August 31 deadline should prepare a statement of assets and liabilities as on March 31, 2026.
