Taxpayers with total income exceeding ₹1 crore must file additional disclosures about assets and liabilities under Schedule AL when submitting their income tax returns. According to the tax department, this schedule mandates disclosure of details related to assets and liabilities held at the end of the financial year. The requirement applies to both individuals and Hindu Undivided Families (HUFs) who are required to file returns with total income above ₹1 crore. As reported by Mint, this step is particularly important because incorrect or incomplete disclosures can attract notices from the income tax department.
In Schedule AL, taxpayers must report immovable property including land and buildings, movable assets such as vehicles, jewellery, archaeological collections, shares, and securities, and cash held as on 31 March 2026. Additionally, they must disclose liabilities related to these assets, including loans taken for property purchases and vehicle purchases. For Assessment Year 2026-27, taxpayers should prepare a statement based on assets held and liabilities outstanding at the end of FY 2025-26. According to the tax department, this disclosure requirement is aimed at ensuring greater financial transparency and helping curb tax evasion.
Schedule AL applies to individual and HUF taxpayers filing ITR-2 (not having income from business and profession) and ITR-3 (having income from business and profession). Companies filing ITR-6 are required to furnish details through Schedule AL-1 and Schedule AL-2. As reported by Cleartax, taxpayers must disclose assets at cost plus any improvement costs incurred. Non-residents and not ordinarily resident individuals with income above ₹1 crore need to provide details of assets situated only in India. 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 date of acquisition.
The mandatory disclosure was implemented due to previous instances where taxpayers' assets did not match their reported income, according to Cleartax reports. Schedule AL helps the income tax department verify whether a taxpayer's assets are consistent with the income they have reported. This verification process ensures that high-income earners maintain proper financial transparency and comply with tax regulations.
