Declaration of Assets & Liabilities in ITR

Black-money has been creating trouble for all the countries around the world. Every year, governments keeps introducing new laws with aim to target people dealing in it.
Presence of black money in the economy not only widens the difference between rich & poor. But in turn push the inflation rates through the roof!
Hence, it comes as no surprise that government & department is continuously working to grab its hold on circulation of black money by introducing new compliance every year.
One such compliance is the “Schedule AL” in the ITR forms.
Today, we are going to share with you all the insights on this schedule. Let’s hop on the ride and demystify the Schedule AL.

What is Schedule AL?

This schedule requires the taxpayer to disclose details of various assets owned by them & the corresponding liabilities.
The requirement for filing the statement is mandatory for specified assesses only.
Reason behind it’s inclusion was to have a record of all the assets owned by certain group of people.

Who needs to file Schedule AL?

If your total income in a previous year exceeds Rs 50 lacs then you are compulsorily required to file Schedule AL.
One interesting thing to note here is that, this schedule is available in 3 different ITR forms. These are ITR-2, ITR-3 & ITR-4. Depending upon which ITR form you are required to use, Schedule AL needs to be filed, if your income exceeds Rs 50 lacs.

What are the details required to be disclosed in schedule AL? 

In ITR 2 details related to 

  • Movable assets,
  • Immovable assets and 
  • Liabilities

Are required to be disclosed in schedule AL. 

In ITR 3 additional information of 

  • Interest held in assets of a firm, AOP, as a partner or member 
  • Along with disclosure requirements  in ITR-2

Should be furnished in Schedule AL.

Where,

  • Immovable assets means land and building.
  • Movable assets refers to bank deposits, shares and securities, insurance policies, loans and advances given, cash in hand jewellery, bullion, vehicles, yachts, boats, aircraft etc. 

For the purpose of this Schedule, ―jewellery includes.- 

(a) Ornaments made out of precious metals like gold, silver, platinum etc. or an alloy containing such precious metals. Ornament, whether or not containing any precious or semi-precious stone, and worked or not worked or sewn or not swen into any wearing apparel; 

(b) Precious or semi-precious stones, whether or not set in any article, furniture, utensils etc or worked or sewn into any wearing apparel.

To make you understand Schedule AL even better. We are attaching the actual images as found in various ITR forms.

ITR-2

Schedule AL ITR

ITR-3

Schedule AL ITR

ITR-4
Schedule AL is not applicable for ITR 1 and ITR 4 as these forms are not applicable when total income exceeds Rs. 50L
Schedule AL ITR

Is the limit of ₹ 50 lacs before or after deductions?

As per the guidelines, the income for determining the limit will be considered after deductions under Chapter VI-A.
Let us consider an example to understand this concept more properly.
Say, your total income before claiming deduction is ₹ 51,50,000. You deposit ₹ 1,50,000 into PPF to claim deduction u/s 80 C.
Now your net taxable income will be ₹ 50 lacs (51,50,000-1,50,000). Since the amount does not exceed 50 lacs then you need not fill Schedule AL.

What if total income is exactly Rs. 50 lakhs?

In case, the total income of a taxpayer is exactly Rs. 50 lakh then in that case schedule is not required to be furnished. Schedule AL is required to be furnished by a taxpayer if total income exceeds Rs. 50 lakh.

How do I have to fill Schedule AL?

There certain points which you need to remember while filing this schedule. These are discussed as below:

  1.  All the assets need to be disclosed at Cost. In case, you had filed wealth tax return (as wealth tax has been abolished now), then value as per that return will be taken. Any “cost of improvement” incurred needs to be included in the value as per wealth tax return.
  2.  If you are a non-resident or not ordinarily resident, then you need to give information of your assets situated in India.

There are also other specific guidelines issued by the department in this regard. We are attaching the image below for your convenience. If you need any assistance while filing the statement, you can get in touch with our eCAs.

How the amounts of assets and liabilities are to be filled-in?

The amount of assets to be reported at :

  • Cost price
  • If asset was forming part of wealth tax, then the value of such asset as per wealth tax return

Liabilities to be disclosed on actual basis.

What are the drawbacks of Schedule AL? 

While filing schedule AL, taxpayers may face following issues :

  • In many cases, cost of asset is not available 
  • Whether personal assets also need to be disclosed or not ?

Looking at the increase in number of disclosure requirements, the compliance seem to be getting tougher day-by-day.
Although it is justified looking at the huge amount of black money in circulation at present. Now what needs to be seen is that how government utilizes all this data.
We hope our blog was able to clarify all your doubts regarding asset & liability statement. If you need any further assistance, our eCAs are there for you 24×7. Happy Filing 🙂 

CA Abhishek Soni

By CA Abhishek Soni

Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Tax2Win.in. Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.

1 comment

  1. One of my known is having some immovable properties which are leased, rental income of which is being declared as income from house property. Tenants have given security deposit. As he is also liable for GST, some GST balances are also outstanding in books as GST input, GST output etc.

    I request you to advise, whether security deposit received from tenants, balances of GST whether debit or credit needs to be shown in AL shchdule, particularly as “Liabilities in relation to Assets”

    Kindly advise.

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