File Statement of Financial Transactions (SFT) by 31^st May

All persons who are reporting entities under Rule 114E read with section 258BA are required to file the  Statement of Financial Transactions (SFT) i.e., SFT on or before 31st May

Statement of Financial Transactions (SFT) i.e., SFT is required to be filed under Section 285BA of the Income Tax Act – 1961 read with Rule 114E of Income Tax Act 1961. The nature and scope has recently been widened so as to include few more transactions within the ambit of SFT reporting.

The categories of person who are covered by SFT reporting requirements normally are as under:

1. Banking Company
2. Registrar wherein property registrations are being done.
3. Credit Card Companies
4. Share Broker
5. Mutual Fund companies
6. Companies (private ltd as well as public limited)
7. Bonds issuing companies
8. NBFC
9. Post Offices
10. Recognised stock exchange
11. Seller of Goods or services receiving an amount of more than Rs. 2 Lakh in cash

 

 

Rule 114E prescribed under the reporting transactions and persons that need to file such records to Director/Joint director of Income Tax (Intelligence and Criminal Investigation).The same is produced below in a synopsis manner to help the reader to get a broad idea of the provisions and rules.

Section 285BA of Income Tax Act 1961 cast a responsibility on the persons which are covered under rule 114E to furnish such records within the time specified.

Rule 114E prescribed under the reporting transactions and persons that need to file such records to the Director/ Joint director of Income Tax (Intelligence and Criminal Investigation).

The nature of transaction covered by the SFT as well as the person who are required to file SFT is summarised hereunder to understand it in a easy way:

Section 285BA read with Rule 114E of the Income Tax Act 1961 (w.e.f April 01, 2016)
Sr. #	Nature of transactions	Reporting Entity
1(a,b)	Cash payment for buying bank drafts, pay order , Banker’s cheque, pre-paid instruments from RBI for an amount aggregating to Rs. 10 Lakhs or more in a financial year	Banking Company, co-operative bank covered under Banking Regulation Act 1949
1(c)	Cash Deposits/ Withdrawal in current account aggregating to Rs. 50 Lakhs or more in a financial year	Banking Company, co-operative bank covered under Banking Regulation Act 1949
2	Cash Deposits other than current account aggregating to Rs. 10 Lakhs or more in a financial year	Banking Company, co-operative bank covered under Banking Regulation Act 1949, Postmaster General
3	Fresh Time Deposits(other than renewal) aggregating to Rs. 10 Lakhs or more in a financial year	Banks, Co-operative Banks, Post Office, Nidhi Company, NBFC
4	Credit card payment aggregating to Rs. – 1 Lakhs or more in cash – 10 Lakhs or more by any other mode	Banks, Co-operative Banks, Any other institutions issuing such cards
5	Bonds/ Debentures purchased for an amount aggregating to Rs. 10 Lakhs or more in a financial year	Any company/institutions issuing such bonds or debentures
6	Share purchase (including share application money) for an amount aggregating to Rs. 10 Lakhs or more in a financial year	Any company/institutions issuing such shares
7	Buy Back of shares (other than from open market)for an amount aggregating to Rs. 10 Lakhs or more in a financial year	Any listed company buying back its securities u/s 68 of CA 2013
8	Units purchase(other than for transfer from one scheme to another) for an amount aggregating to Rs. 10 Lakhs or more in a financial year	Trustee/ Authorized personnel of Mutual Fund
9	Sale of Foreign currency by whatever mode to a person for an amount aggregating to Rs. 10 Lakhs or more in a financial year	Authorized person as per FEMA 1999
10	Purchase/ Sale of immovable property by any person for an amount of Rs. 30 Lakhs or more as valued by Stamp valuation authority	Inspector General/Registrar/Sub registrar
11	Receipt of cash payment by any person for sale of goods or supply of services of any nature of an amount exceeding Rs. 2 Lakh	Any person who is liable for audit under section 44AB of the Act.
12	Cash deposits during November 9, 2016 to December 30, 2016aggregating to Rs. -12.5 Lakhs or more , in one or more current account of a person -2.5 Lakhs or more , in one or more account (other than current account) of a person	Banking Company, co-operative bank covered under Banking Regulation Act 1949, Postmaster General
13	Cash Deposits during April 9, 2016 till November 9, 2016 in respect of accounts reportable under clause 12(above)	Banking Company, co-operative bank covered under Banking Regulation Act 1949, Postmaster General
14	Capital gains on transfer of listed securities or units of Mutual Funds

 

(i) Recognised Stock Exchange;

(ii) depository as defined in clause (e) of sub-section (1) of section 2 of the Depositories Act, 1996 (22 of 1996);

(iii) Recognised Clearing Corporation;

(iv) Registrar to an issue and share transfer agent registered under subsection (1) section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992).

 

15Dividend IncomeA company16Interest Income
(i) A banking company or a co-operative bank to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act);

 

(ii) Postmaster General as referred to in clause (j) of section 2 of the Indian Post Office Act, 1898 (6 of 1898);

(iii) Non-banking financial company which holds a certificate of registration under section 45-IA of the Reserve Bank of India Act, 1934 (2 of 1934), to hold or accept deposit from public.
 

 

 

What is the Due Date?

– May 31 immediately following the end of the financial year in which the above transactions are registered or recorded.

Summary & mode for submission:

Schema/format can be downloaded from the income tax site under the tab “schema” and e filing  utility can be downloaded “under forms (other than ITR)”. Separate form 61A needs to be furnished for each of the 14 types of transactions that are reportable. Aggregation rule is to be taken for considering whether such a transaction pertaining to such a person is reportable or not. Aggregation rule is applicable for all the transactions subject to exception for Clause 10 and Clause 11.

Form 61A is to be furnished to the Joint/Director of Income Tax (Intelligence and Criminal Investigation) by electronic means with digital signature.

It contains Four Parts which are A,B,C,D which are discussed as follows :

1. Part A – contains statement level information is common to all transaction types
2. Part B (Person Based Reporting) – Consists of transactions under clauses 1(a,b), 1(‘c), 5, 6,7,8,9,10,11,13. Aggregation rule is applicable to determine whether the transaction are reportable or not
3. Part C (Account Based Reporting) – Consists of transactions under clauses 3,4,14.
4. Part D (Immovable property transaction reporting) – Consists of transactions under clause 12.

On further emphasis the notification laid down the following statement types:

Statement Types:

One Statement can contain only one type of Statement. Permissible values for type of Statement are:

NB – New Statement containing new information

CB – Correction Statement containing corrections for previously submitted information

ND – No Data to report

After furnishing the return a statement ID and statement number shall be provided which shall be used for future references.

Consequences of Non Compliance:

Penalty @ Rs 100 per day of default of furnishing

Penalty for providing inaccurate information shall be Rs. 50,000

Penalty for non – compliance to notice calling for filing of return @ Rs 500 per day of such default.