It is a form under which all taxpayers submit the Statement of Financial Transactions (SFT) for every financial year. The nature and the value of these Specified Financial Transactions have to be provided along with the Form 61A along with supporting documents if required. Certain kinds of financial transactions are crucial to the economy purely on the merit of the nature of the transaction and not the value or the volume of the transaction. Such transactions need to be recorded by the government for purposes other than taxation. It gives the government a general idea concerning the income and expenditure patterns of the taxpayer. These critical areas can help it with many things such as predicting the mood of the market or predicting growth and help it formulate schemes to leverage this growth further.
And so the government requires all taxpayers to report these transactions irrespective of whether they attract taxes or not. For uniformity of reporting and to increase the ease of assessing these transactions the government issues specific forms in specific formats for this kind of reporting. Form 61A is one such form.
It is a form that requires individuals to report any transactions that are listed under this form. Let’s go a little more in-depth into Form 61A specifically.
What is Form 61A?
Form 61A lists all the Specified Financial Transactions carried out in a financial year. This helps the Income Tax department identify high-value transactions and curb possible tax evasions. Additionally, the availability of these documents would help individuals/organizations track high-value specified financial transactions for their records.
Types Of Transactions Under Form 61A
The transactions included under the Specified Financial Transactions are:
- Transactions made for purchasing, selling, exchange of goods.
- Work contracts.
- Transactions regarding the delivery of various services.
- Transactions involving the investments and expenditures made.
- Deposits and loans.
The inclusion and exclusion limits for reporting the transactions so made vary according to the nature of the transaction.
Form 61A Format
You must fill in the following details in the Form 61A are as follows:
- Name
- PAN
- Folio Number
- Address
- Number of SFT
- The SFT and their total value in the financial year
- The financial year has to be mentioned in which all the transactions are being done.
- Details regarding the transactions made.
- Specified Financial Transactions
Due Date Of Form 61A
Form 61A has to be mandatorily submitted before 31st May of every financial year. Under any circumstances, if the taxpayer is unable to submit this form, a notice period of 30 days is offered to fulfill the formalities for the same.
Importance Of Form 61A
This form is of crucial value for the Income Tax Return Filing Department, helping them track all high-value transactions that are being made by the individuals, along with gaining insight into how taxes on these transactions may be evaded.
It helps in developing transparency in the tax collection system. Not just this, it also allows individuals to record all the high-value and specified transactions they have carried out throughout the financial year.
Form 61A of Income Tax can be used in place of a PAN Card, on transactions, clause (a) to (h) Rule 114B. The transactions are –
- Purchasing and selling of immovable property, worth above 5 lakh rupees
- Purchasing and selling of vehicles excluding a two-wheeler
- Fixed deposits worth above 50 thousand rupees with a bank and a post office
- Specified securities, worth above 10 lakh rupees
- Bills for hotels and restaurants, above 25 thousand rupees
Penalties for Default in Submitting Form 61A
In case the individual fails to file and submit form 61A, the authorities will send a warning to them with a tenure of 30 days. During this period, it is expected that the individual submit the form. After 30 days, a penalty of 500/day is charged for the same.
Penalties for Submitting the Wrong Information and Details
In case the Income Tax authorities find any discrepancies, then the individual is informed, and a time of 30 days is provided for rectifying the same. If the person fails to do so, they have to pay penalties of up to INR 50,000. The date for rectification of mistakes can be extended in case of default information entered.
If the reporting entity or individual discovers any inaccuracy or discrepancy in the information provided in Form 61A then he shall get in touch with the concerned income tax authority within 10 days to correct without any penalties. If the income tax authorities find out that the information furnished in Form 61A is defective or incomplete in any way then they inform the reporting entity or person.
The reporting person or entity is allowed to rectify the information within 30 days from the date of intimation.
The following are the penalties defined in the Income Tax Act for not furnishing a corrected Form 61A:
- The penalty of Rs. 50,000 is levied on reporting entities and individuals who find out about the inaccuracy in data after submitting the statement but do not inform the concerned authorities and furnish correct information within 10 days.
- The penalty of Rs. 500 per day is levied from the expiry of the original due date till the due date mentioned in the notice for default because of furnishing incorrect information. The penalty of Rs. 1000 per day is levied beyond the due date specified in the notice.
The concerned tax authority may extend the date for rectification of details in the case of default. However, if the reporting entity or person fails to rectify the information even after receiving the notice, the statement in question (Form 61A) is treated as invalid.
End Notes!
The Form 61A of Income Tax is quite essential to deal with all the high-value transactions and finances to maintain transparency. However, it may seem complicated and technical from a taxpayer’s point of view, and keeping the penalties for defaulting and furnishing wrong information, it is always advisable to consult an expert to fill this form. If you have any other tax-related queries or require guidance with your form 61A or any other regulatory form, contact us and we will ensure that you receive the right kind of assistance for your requirements.
