If your income exceeds ₹1 crore, make sure to fill out this form when filing your ITR; otherwise, you could receive a notice..

ITR Filing 2026: If your total income exceeds ₹1 crore in the financial year 2025-26, you must adhere to an additional rule while filing your Income Tax Return (ITR). For such taxpayers, merely declaring income is insufficient; they are also required to provide details regarding their assets and liabilities. The Income Tax Department has clarified that it is mandatory for individuals and Hindu Undivided Families (HUFs) with an income exceeding ₹1 crore to fill out 'Schedule AL' in their ITR. Providing incorrect or incomplete information could result in receiving a notice from the department.

What is Schedule AL?
Schedule AL stands for 'Assets and Liabilities.' This requirement applies to individual taxpayers and HUFs whose total income exceeds ₹1 crore. Taxpayers filing ITR-2 and ITR-3 are required to provide this information. Meanwhile, for companies, separate provisions exist under Schedule AL-1 and AL-2 within ITR-6.

Which assets must be disclosed?
In Schedule AL, the taxpayer must provide details of all major assets held as of March 31, 2026. This includes immovable property (such as land and houses), vehicles, jewelry, shares, securities, archaeological collections, cash in hand, and other valuable assets. Additionally, details regarding any liabilities associated with these assets must also be disclosed.

How will asset value be determined?
According to the Income Tax Department, the value of assets is to be reported based on their acquisition cost. Any subsequent expenditure incurred on improvements to the asset may also be added to this cost. If an asset was acquired via gift, will, or other means, the value declared should be based on the previous owner's acquisition cost plus the cost of any improvements made. If cost details are unavailable, an estimated value may be reported.

Why is this disclosure necessary?
The Income Tax Department states that discrepancies have been observed in many cases between a taxpayer's declared income and their assets. For this reason, Schedule AL has been made mandatory for individuals with an income exceeding ₹1 crore. This enables the department to verify whether a taxpayer's assets align with their declared income. The objective is to enhance transparency and curb tax evasion.

Keep these points in mind as well:
Details of assets and liabilities must be provided as they stand on March 31, 2026. Taxpayers classified as non-residents or 'not ordinarily residents' are required to disclose information only regarding assets located in India. It is essential to provide accurate and complete information to avoid any subsequent inquiries or notices from the Income Tax Department.

Disclaimer: This content has been sourced and edited from Money Control. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.