While reading an online document, I came across information stating that if your earnings exceed INR 50 lakh after subtracting deductions, you are required to fill out schedule AL. For instance, if an individual earns 60 lakhs and utilizes tax-saving options such as HRA, 80C, and company tax benefits (such as food and gadgets), I’m curious about how net income is calculated and what deductions are taken into account. Additionally, I would like to know if this applies to individuals in job-class positions as well.
Hi @sahilwiz345
Your understanding is correct, if the net income of an individual exceeds ₹50 lakhs, he/she must mandatorily file Schedule AL.
The schedule AL must be filed by taxpayers filing ITR-2, including taxpayers with income (even if only salary income) above ₹50 lakhs.
The person can claim all the Chapter VI-A deductions assuming he is opting for the old regime.
Read more about Who should file Schedule AL in ITR?- Learn by Quicko for your reference.
Hope this helps.
Hy @ Shrutika_Shah Chapter VI-A deductions cover LTA ? i did not find this info
Hi @sahilwiz345
No, LTA is not covered under chapter VI-A deductions. It is an allowance as a part of your salary income.
SCHEDULE AL - Assets and Liability at the end of the year (Applicable in a case where Total Income exceeds Rs 50 Lakh) and These are following sections required to fill and complete .
Jewellery, bullion etc.
Archaeological collections, drawings, painting, sculpture or any work of art 0
Vehicles, yachts, boats and aircrafts
Financial asset
(a) Bank (including all deposits)
(b) Shares and securities
(c) Insurance policies
(d) Loans and advances given
(e) Cash in hand
What is Total Income exceeds Rs 50 Lakhs . Does the Exempt income comes under category of TOTAL INCOME. Do we need to add Exempt Income or ignore it. Total Taxable Income ??? What exactly this Schedule and applies to whom ???
Kindly clarify.
Hi @Srikanth,
Schedule AL needs to be filed when your net income exceeds ₹50 lakh. This net income is derived after considering all the deductions that you are eligible for.
For example, if your total income is ₹51L and you are claiming deductions of ₹1.5L, your net income would become ₹49.5L and hence, you’ll not be liable to fill Schedule AL.
Moreover, exempt income is not added to your total income for tax purposes.
Hope this clarifies your query.
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Thanks a lot maam. Greatly appreciated
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When calculating net income for tax purposes, you start with the total earnings and then subtract allowable deductions. In the scenario you described, if an individual earns INR 60 lakh and utilizes tax-saving options like HRA, 80C, and company benefits, these deductions are subtracted from the total earnings. The resulting figure, after deducting all eligible expenses, represents the net income. Schedule AL is required if this net income exceeds INR 50 lakh. This applies to individuals in job-class positions as well, as long as their earnings meet the specified threshold.
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Thank you very much for the clarity.