Schedule Al

Schedule AL preparation (ITR-2, India)

Produce Schedule_AL_FY<year>.md in the tax-year folder. Schedule AL exists in ITR-2/3 only — ITR-1 (Sahaj) has none (its ₹50L income ceiling sits below the AL threshold anyway; skip this skill for ITR-1 filers). It is mandatory when total income exceeds the form's threshold — ₹1 crore from AY 2025-26 (was ₹50 lakh through AY 2024-25); the applicability line is printed on the schedule screen itself, so verify it for the current AY. It reports every asset at COST as on 31-Mar — historical purchase cost, never market/depreciated value. Build it once as a persistent register; from year two, roll it forward.

Inputs to collect first (via the itr-reconcile intake checklist): prior-year filed return (for the YoY continuity table), consolidated CAS, bank/PPF/NPS statements, PMS statements — and from the taxpayer: property purchase costs, vehicle on-road cost, jewellery/gold/cash estimates, loan details. Ask them to download/add anything missing to the tax folder before you build the register.

ITR-2 structure to fill

A. Immovable property (each property a separate row with address) · B(i) jewellery/bullion · B(ii) art · B(iii) vehicles · B(iv) financial assets: (a) bank incl. all deposits (FDs; PPF typically here) (b) shares & securities (c) insurance policies (d) loans given (e) cash in hand · C. Liabilities in relation to the assets at A+B.

1. FIXED blocks — carry forward verbatim (cost never changes)

• Immovable property at purchase cost. ⚠️ List each parcel as a separate row even at one location — the schedule wants per-property rows, not clubbed totals.
• Inherited/gifted assets at the PREVIOUS owner's cost (+ improvements) per the official instructions; where that cost is unascertainable, the circle/bullion rate as on the acquisition date may be used.
• Vehicles at on-road cost (incl. GST + registration).
• Unlisted/startup equity at ACTUAL cost incl. premium — never face value (it also sets the cost base for a future sale). Options / CCPS / SAFEs / convertibles are NOT equity shares → they stay out of the unlisted-equity-shares schedule (Part A general) and sit in AL "shares & securities/other".
• Each year ask only: anything bought or sold in this block?

2. GROWS by additions — prior figure + this year's additions

• ULIPs / investment insurance at cumulative premiums paid — that IS the cost basis the form mandates; surrender/fund value is market value, not cost — don't use or switch to it. Term & health covers are expenses, NOT assets — never include.
• Jewellery + physical gold at cost where known (invoices/card statements); a documented taxpayer estimate is the FALLBACK for old/inherited pieces without records — fix it once, don't re-mark it each year (cost never changes; only additions move the figure). If additions were bought on a credit card, get the transaction list: cost goes into B(i) AND dues unpaid at 31-Mar go to Part C (see §4).
• Digital gold/silver platforms (e.g. Gullak/Augmont, eBullion): cost of grams still held on 31-Mar = lifetime invested per the app/annual statement MINUS the cost of anything sold/redeemed; leased-out grams are still owned; interest-grams enter at their taxed value.
• NPS Tier I at cumulative contributions (that is the cost figure; the statement's market value is not — use the CRA statement only to source the contribution history).

3. EXTRACT from documents each year (don't ask)

• Consolidated CAS (CDSL/NSDL): per-demat and MF-folio values as on 31-Mar → "shares & securities". Note in the doc: AL prefers cost; CAS gives VALUE only — cost comes from broker holdings CSVs and PMS audited statements ("Investments - At Cost"), and MF-folio cost via camsonline.com → Statements → "CAS – CAMS + KFintech" (mailback to the registered email; one request covers BOTH RTAs and carries a Cost Value column per folio as on the chosen date) — the depository eCAS never carries MF cost. ⚠️ Dedupe that CAS before summing: its "(Demat)" rows are usually PMS-held units already inside the PMS audited cost, and a PMS can also run a direct liquid-fund folio under the client PAN (registered to the PMS's ops email) that appears in the depository folio list AND inside the PMS audited investments — count it once (the AL-side sibling of the RTA-vs-PMS capital-gains dedup). Cost is the mandated basis — use the cost sources above and keep the SOURCING consistent YoY (never silently switch a line from cost to value). SGBs are securities (inside demat), not bullion.
• Bank closing balances 31-Mar from statements/interest certificates. ⚠️ Take the running balance at the last transaction dated on/before 31-Mar (statements can be reverse-ordered or run into April) — a late-March credit (e.g. a 30-Mar dividend) can land after a mid-scan balance and silently understate the figure.
• FD principal: ⚠️ certificates can list the same deposit twice after a branch migration (same deposit number, two branch rows) — dedupe principal; the interest legs are usually distinct periods and all count.
• PPF closing balance from the statement (interest credited 31-Mar is exempt → Schedule EI, not income).
• EPF closing balance from the passbook (employee + employer shares incl. credited interest; the EPS pension corpus stays out). No official AL mapping exists for EPF/NPS: majority practice reports both under "shares & securities" (PPF under bank-deposits); a contra practitioner view treats them as outside AL's enumerated fields. Pick the inclusive mapping, record the stance in the register, keep it consistent YoY.
• PMS cash-equivalents caveat: audit statements' "cash & equivalents" include liquid-MF units — those are securities; only the pure bank balance goes under bank.

4. ASK the taxpayer each year (they hold these numbers)

Ask in one batch:

1. PMS-operated current-account balances 31-Mar (accounts in the taxpayer's name via POA). Negative balance → report 0 as asset and the overdrawn amount under liabilities.
2. Cash in hand (their actual; re-ask every year, never reuse).
3. Platform lifetime-invested figures AND any redemption/sale history (digital gold etc. — the disposals are needed to net their cost out per §2).
4. Additions: jewellery/gold, ULIP premiums, property/vehicle/unlisted shares, loans given.
5. Spouse-funded investments (clubbing): expert views differ — if the taxpayer funded an asset AND is a joint owner, declare the full cost in their AL; if it sits solely in the spouse's name, it is effectively a gift and stays out of the funder's AL (the income may still club for tax).
6. Liabilities — apply the two-prong test. Part C is "liabilities in relation to Assets at (A+B)", so a liability qualifies only if it was (1) outstanding on 31-Mar AND (2) financed a disclosed A/B asset. Loans against property/vehicles/securities qualify. Credit-card dues qualify only for the slice that bought an asset (e.g. jewellery on card, statement due in April) — and that purchase cost must sit inside the asset side too, so the funding story is self-explaining. Tax payments and consumption charges on the same unpaid statement do NOT qualify (outstanding, but they relate to no A/B asset; tax credits live in Schedule IT). Keep the card statement + settlement proof as evidence.

5. Rules & hygiene

• Foreign assets go in BOTH schedules (CBDT Circular 18/2019, Q.14) — FA-reported assets must ALSO appear in Schedule AL when AL applies; the overlap is intended. Mind the period asymmetry: FA = calendar year at initial/peak/closing values; AL = held-on-31-Mar at cost. A foreign stock held a day mid-CY → FA only; one bought Jan–Mar → AL now, FA only next year. Crypto has NO dedicated AL row (even in the AY 2026-27 forms) — report 31-Mar holdings at cost under shares & securities.
• Only assets held on 31-Mar enter AL — a buy-and-sell within the year never appears (its proceeds sit in the bank line; gains in Schedule CG).
• Always build a YoY continuity table vs the prior filed return's Schedule AL (from the prior ITR JSON/ack). Flag any category that moves without purchases/sales to explain it; decompose big moves (basis-completion vs estimate revision vs real purchases).
• MONEY gifts from relatives are not separate AL lines — the cash lands in the bank-balance line; note them as funding trail (Schedule EI if exempt). An ASSET received as gift DOES sit in its normal AL block at the previous owner's cost (§1).
• Verify totals programmatically (python bottom-up sum of every component) before writing the doc, and again against the portal screen before Confirm.
• Materiality: AL is disclosure-only (no tax effect) and carries no dedicated penalty — but unexplained assets invite s.69/69A/69B additions taxed ~78% u/s 115BBE plus the s.271AAC penalty (s.270A where it applies instead), and AL↔AIS mismatches are scrutiny triggers. The department reads AL as assets + the borrowings that explain them — keep pairings coherent and the register documented.