What is Schedule AL?
Schedule AL is a statement of disclosure of assets and liabilities which the taxpayer shall disclose in the Income Tax Return (ITR). This was introduced from AY 2016-17. Where in the case of an assessee, there is a balance sheet the Schedule AL need not be filed if the applicable conditions as mentioned below are fulfilled, however, assets/liabilities not forming part of the balance sheet will have to be entered under Schedule AL.
Applicability of Schedule AL
An Individual and HUF having total income above Rs 50 Lakhs shall disclose in the ITR.
If the total income is just Rs 50 Lakhs then schedule AL shall not be applicable.
Drawbacks of Schedule AL
The drawbacks of Schedule AL:
- Ignoring Depreciation and Appreciation: Declaring assets at cost in Schedule AL overlooks the natural depreciation or appreciation in their value over time. This can lead to an inaccurate representation of an individual's true financial standing.
- Unfair Valuation: Assets like vehicles lose value as they are used, making it unfair to declare them at their original cost. Conversely, assets like real estate might appreciate significantly, leading to undervaluation when declared at cost.
- Inaccurate Wealth Assessment: Failing to account for depreciation and appreciation makes it challenging to accurately assess an individual's actual wealth, potentially leading to misinterpretations of their financial status.
- Complex Inherited Assets: In cases of inherited assets with no historical purchase records, determining the original cost becomes difficult. This poses challenges in adhering to the cost-based reporting required by Schedule AL.
Does the total income of Rs. 50,00,0000 and above taken after the deduction under Chapter VI?
The total income shall be calculated after the deduction under chapter VI.
(Gross income - deduction = Total income)
|
Scenario |
Gross income |
Deduction |
Total |
Is schedule AL Applicable ? |
|
I |
57,00,000 |
1,50,000 |
55,50,000 |
YES |
|
II |
55,50,000 |
1,70,000 |
53,80,000 |
YES |
|
III |
50,30,000 |
1,50,000 |
48,80,000 |
NO |
What happens if the total income after deduction under chapter VI is RS. 50 lakhs?
If the total income is Rs. 50 lakhs after the deduction under chapter VI , then schedule AL is not Applicable.
For Example Mr A's total Income before deduction is Rs. 51,70,000. He qualifies for the maximum benefit of RS 1,50,000/- under 80 C and Rs.20,000 under 80D, His total income after deduction is Rs 50,00,000. And therefore schedule AL shall not be applicable for Mr A.
What are the details to be disclosed?
- Immovable Property like Land and Building
- Movable Property like Jewellery,(including gold, silver, semi precious and precious stones), Bullion, Vehicles, boats, aircrafts, vessels, Cash in Hand and Bank. Except assets for personal use like wearing apparels, furniture used by taxpayer or his dependent.
- Liabilities like Housing loan, Vehicle Loan, Personal loan.
What will be the valuation of the assets?
- The Assets shall be valued at COST.
- Sometimes the cost of the asset may be unknown due to inheritance of property or assets received as a gift in such scenarios the asset shall be valued at cost incurred to the previous owner.
- If a property is inherited before 2001, then the Fair Market Value of the Property shall be the cost.
Is schedule AL applicable for a Non-resident?
Yes Schedule AL is applicable for a Non-resident whose total income exceeds Rs. 50,00,000 .
ITRs in which schedule AL is disclosed
For an individual,Schedule AL, is in the forms such as ITR2, ITR3 and ITR4.
Format of Schedule AL
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