Schedule AL in Income Tax: Your Guide for 2026-27

By Parish Rao · 9 September 2026 · 13 minute read

As the founder and director of Rao Valuers, I've seen firsthand the questions and confusion that arise when individuals navigate India's income tax regulations. One area that often causes concern, especially for those with significant assets, is Schedule AL.

As the founder and director of Rao Valuers, I've seen firsthand the questions and confusion that arise when individuals navigate India's income tax regulations. One area that often causes concern, especially for those with significant assets, is Schedule AL. This part of your Income Tax Return (ITR) requires you to declare your assets and liabilities, and it's crucial to get it right.

This guide will break down Schedule AL in plain English, explaining what it is, who needs to file it, and crucially, how to report your property values correctly. At Rao Valuers, we've been government-approved and IBBI-registered property valuers since 1995, helping individuals and businesses with precise valuations for various purposes. While Schedule AL itself requires reporting at cost, understanding the distinction from market value is key to avoiding errors.

TL;DR Answer Block

Schedule AL (Assets and Liabilities) is a mandatory part of ITR-2 and ITR-3 for individuals and HUFs with a total income exceeding ₹50 lakh in a financial year. It requires reporting specified assets, including property, and corresponding liabilities at their cost of acquisition, not their current market value, as of March 31st of the financial year.

What Is Schedule AL in Income Tax?

Schedule AL, short for Assets and Liabilities, is a specific section within your Income Tax Return (ITR) forms. It requires certain taxpayers to provide a detailed statement of their assets and corresponding liabilities at the end of the financial year, specifically as of March 31st. The primary goal of Schedule AL is to enhance transparency regarding the financial standing of high-net-worth individuals and Hindu Undivided Families (HUFs) in India. It helps the Income Tax Department track wealth and ensure that declared income aligns with the assets held.

Who Is Required to File Schedule AL

You are required to file Schedule AL if you are an individual or a Hindu Undivided Family (HUF) and your total income for the financial year exceeds ₹50 lakh. This threshold is important. If your total income is below ₹50 lakh, you generally do not need to fill out Schedule AL. This requirement applies to those filing ITR-2 and ITR-3 forms. For instance, if your income for the Financial Year 2025-26 (Assessment Year 2026-27) is more than ₹50 lakh, you will need to complete Schedule AL. This rule is as per Income Tax Department guidelines.

Why the Government Introduced Schedule AL

The government introduced Schedule AL starting from Assessment Year 2016-17 (Financial Year 2015-16) through the Finance Act. The main reason was to increase financial transparency and curb black money. By requiring taxpayers to declare their significant assets and liabilities, the Income Tax Department gains a clearer picture of their wealth. This helps in cross-verifying income declarations and identifying discrepancies, ultimately promoting better tax compliance. It's a tool for the tax authorities to ensure that the lifestyle and assets of high-income earners are consistent with their declared income.

What Assets and Liabilities Must Be Reported

Schedule AL demands a comprehensive declaration of various assets and their associated liabilities. It's not just about property; it covers a range of movable and immovable wealth.

Immovable Property (Land, Buildings)

This is often the most significant part for many taxpayers. You must declare all immovable properties you own, whether residential, commercial, or agricultural land. The key here is to report the cost of acquisition of these properties. This means the actual price you paid to acquire the asset, including any registration charges, stamp duty, or cost of improvements, not its current market value. For instance, if you bought a plot of land in 2005 for ₹20 lakh, and its market value today is ₹1 crore, you still report ₹20 lakh in Schedule AL. This distinction is crucial and often misunderstood.

Movable Assets (Jewellery, Vehicles, Bank Deposits, etc.)

Beyond property, Schedule AL requires you to list various movable assets. These include:

• Jewellery, Archaeological Collections, Drawings, Paintings, Sculptures, or any work of art: Report these at their cost of acquisition. If inherited, the cost to the previous owner or fair market value at the time of inheritance (if cost is not ascertainable).
• Vehicles: Declare the cost at which you purchased your cars, bikes, or other vehicles.
• Cash in hand: Any physical cash you hold.
• Bank Deposits: This includes savings accounts, fixed deposits, and other bank balances.
• Shares and Securities: The cost of acquiring shares, debentures, and other financial securities.
• Loans and Advances given: Any money you have lent to others.

Again, for all these movable assets, the reporting value is the cost of acquisition, not their current market value as of March 31st.

Liabilities Linked to These Assets

Schedule AL also requires you to declare any liabilities that are linked to the assets you've reported. This primarily includes loans taken for acquiring these assets. For example, if you have a home loan for a property you've declared, you must also report the outstanding balance of that home loan as a liability. Similarly, vehicle loans or loans taken to purchase shares would also be included. The idea is to present a net picture of your wealth.

How to Fill Out Schedule AL Step by Step

Filling out Schedule AL requires careful attention to detail. It's not just about listing assets, but about providing the correct values and ensuring consistency with other parts of your ITR.

Where Schedule AL Appears in ITR-2 and ITR-3

Schedule AL is an integral part of ITR-2 and ITR-3 forms. These forms are typically used by individuals and HUFs who have income from sources like salaries, house property, capital gains, other sources, and for ITR-3, also from business or profession. You will find Schedule AL as a distinct section within these forms, usually towards the end, after all income and deductions have been calculated. The online tax filing utility provided by the Income Tax Department will guide you to this section if your income exceeds the ₹50 lakh threshold.

Reporting Property, Cost of Acquisition, Not Market Value

This is perhaps the most critical point for property owners. For Schedule AL, you must report the cost of acquisition of your immovable property. This is the amount you originally paid to purchase the property. It should also include any expenses directly related to the purchase, such as stamp duty, registration fees, and the cost of any improvements made to the property before March 31st of the financial year.

You do not report the current market value of your property. For example, if you bought a house for ₹80 lakh in 2010 and its current market value is ₹2 crore, you will enter ₹80 lakh in Schedule AL. This is a common point of confusion, and at Rao Valuers, we've been asked by clients filing Schedule AL whether their property's original cost or market value should go on the form. The distinction is clear: it's the cost of acquisition.

Common Mistakes Taxpayers Make

Even with clear guidelines, taxpayers often make mistakes when filling out Schedule AL:

• Confusing Cost with Fair Market Value (FMV): As discussed, this is the most frequent error. Schedule AL specifically asks for the cost of acquisition, not the current market value. FMV is relevant for other tax calculations, like capital gains valuation for property sold after 2001, but not for Schedule AL.
• Omitting Inherited Property: Many taxpayers forget to declare inherited property. For inherited assets, if the cost to the previous owner is known, that should be reported. If not, the fair market value as on the date of inheritance can be considered as the cost.
• Missing Liabilities: Forgetting to declare loans taken against the reported assets can lead to an inaccurate representation of your net worth. It's important to list all outstanding loans linked to the assets.
• Not Reporting All Assets: Sometimes, smaller movable assets or bank deposits are overlooked. Ensure you declare all specified assets that meet the reporting criteria.
• Incorrectly Valuing Jewellery: For jewellery, the cost of acquisition should be reported. If purchased over time, maintaining records is important.

Schedule AL and Property Valuation, Where They Intersect

While Schedule AL requires you to report the cost of acquisition for your property, this doesn't mean property valuation is irrelevant. Understanding the difference between cost and market value is crucial for various other financial and tax scenarios.

When You Actually Need a Valuation Report

A professional property valuation report, like those we provide at Rao Valuers, is essential for many situations, but not directly for filling out Schedule AL. For Schedule AL, you rely on your purchase documents to state the cost of acquisition.

You do need a valuation report for purposes such as:

• Capital Gains Valuation: When you sell a property, especially one held for a long term, you need to calculate capital gains. For properties acquired before April 1, 2001, the Fair Market Value (FMV) as on April 1, 2001, is used as the cost of acquisition for capital gains calculation. This requires a professional valuation. We specialize in providing accurate capital gains valuation for property sold after 2001.
• Bank and Mortgage Valuations: Banks require valuation reports to assess the collateral value of a property before sanctioning loans.
• Inherited Property Valuation: For estate planning, distribution among heirs, or sometimes for tax purposes related to inheritance, an inherited property valuation is necessary.
• Visa and Immigration Valuations: Some countries require a valuation of your assets for visa or immigration applications to prove financial standing.
• Court and Family Matter Valuations: In cases of divorce, property disputes, or other legal matters, an independent valuation is often required by courts.
• Gift Tax Purposes: If you gift a property, its fair market value might be relevant for gift tax implications.

So, while Schedule AL asks for cost, these other scenarios require a professional valuer to determine the current or historical fair market value.

How to Avoid Errors When Declaring Property Value

To avoid errors when declaring property value for Schedule AL, always:

1. Refer to Purchase Documents: Use your sale deed, registration documents, and receipts for improvements to ascertain the exact cost of acquisition.

2. Maintain Records: Keep meticulous records of all property-related transactions, including purchase price, stamp duty, registration charges, and renovation costs.

3. Distinguish Cost from Market Value: Understand that Schedule AL is unique in asking for cost. Do not confuse it with the current market value, which is relevant for other purposes.

4. Seek CA Guidance: Consult your Chartered Accountant (CA) for clarity on any complex scenarios, especially regarding inherited property or property with multiple owners.

5. For Other Needs, Consult a Valuer: If you need a property's market value for capital gains, loans, or other purposes, then engage a government-approved valuer like Rao Valuers.

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Tools and Resources Compared

Navigating Schedule AL and property valuation can involve various resources. Here's an honest comparison of where you can get guidance and support:

As you can see, each resource serves a different purpose. For Schedule AL, your CA and the official ITD utility are your primary resources for filing. However, when it comes to understanding the difference between cost and market value, or when you need an actual valuation report for capital gains, loans, or other purposes, that's where a specialist like Rao Valuers comes in. We work alongside your CA, providing the precise property valuations they might need for other tax-related filings, but not for the Schedule AL cost declaration itself.

FAQs

Here are some common questions we encounter regarding Schedule AL and property.

Do I need to report my house in Schedule AL if I have a home loan?

Yes, if your total income exceeds ₹50 lakh, you must report your house property in Schedule AL at its cost of acquisition. Additionally, you must also declare the outstanding home loan amount as a liability linked to that asset. This provides a complete picture of your financial position.

Should I report market value or purchase price of my property in Schedule AL?

You must report the purchase price, also known as the cost of acquisition, of your property in Schedule AL. Do not report the current market value. The Income Tax Department specifically asks for the cost incurred to acquire the asset.

What happens if I forget to report an asset in Schedule AL?

Forgetting to report an asset in Schedule AL can lead to discrepancies in your tax filing. The Income Tax Department may issue a notice seeking clarification. If the omission is significant and deemed intentional, it could lead to penalties. It's always best to declare all applicable assets and liabilities accurately.

Is Schedule AL applicable to NRIs?

Yes, Schedule AL is applicable to Non-Resident Indians (NRIs) if their total income in India exceeds the ₹50 lakh threshold. NRIs must report their assets located in India and the corresponding liabilities. For specific guidance on NRI property valuation guidance, you can refer to our services.

Does inherited property need to be declared in Schedule AL, and at what value?

Yes, inherited property needs to be declared in Schedule AL if you are required to file it. For inherited property, you should declare the cost of acquisition to the previous owner. If that cost is not ascertainable, you can use the fair market value of the property as on the date of inheritance as its cost.

When do I actually need a professional valuation report versus just Schedule AL disclosure?

You need a professional valuation report from a government-approved valuer for situations where the Fair Market Value (FMV) of a property is required, not just its cost of acquisition. This includes calculating capital gains when selling property (especially if acquired before April 1, 2001), obtaining bank loans, settling inherited property disputes, visa applications, or any court-related matters. For Schedule AL itself, you only need to state the cost of acquisition based on your purchase documents.

At Rao Valuers, we are ISO 9001 certified and have been providing accurate, government-approved valuation reports for 35 years. With over 40 expert valuers, we ensure your reports are accepted by banks, tax offices, and courts without questions, delivered typically within 48-72 hours. We don't just give you a number; we provide a reasoned, defensible valuation.

If you need a precise valuation for capital gains, bank loans, inherited property, or any other purpose where fair market value is critical (explicitly not for Schedule AL's cost declaration), we're here to help.

Contact us via WhatsApp for a free consultation. There's no obligation, and your details are never shared. We can clarify how our services fit your specific needs, whether it's for capital gains valuation for property sold after 2001 or any of our other full range of valuation services.