Eyeing upon the high value transactions which are done by taxpayers, the income tax act made a concept for furnishing Statement of Financial Transactions(sft) or any reportable account also known as the Annual Information Return (AIR).
Section 285BA of Income Tax Act requires particular reporting persons to fulfill this statement. Rule 114E of Income Tax Rules,1962 provides that the statement should be provided in the form 61A.
Which are Specified Financial Transactions(SFT)?
Specified Financial Transactions (SFT) are of the following types:-
- Works contract
- Providing services
- Any investment made or expenditure incurred
- Accepting any deposit or taking any loan
- Sale, purchase or exchange of goods, right, property or interest in any property.
Its important to note that Central Board of Direct Tax recommends different values with respect to different transaction for different people by considering the nature of those transactions.
Due Date of filing Form 61A
The Statement of Financial Transactions (SFT) is required to be furnished till 31st May of next year for every previous financial year where the transaction has occurred. Penalty under the Section 271FA is Rs.500/day will be placed for the initial failure for filing within the due date. The authority would issue notice to such an assessee, which demands the assessee to submit the form in 30 days from issuance of the notice.
If such an assessee continues to be assesssee and not answers to this notice, a penalty would be placed on the assessee which would amount to Rs.1000/day. This would be calculated from expiry of such period as given in such notice.
Who is required to furnish Form 61A
- A banking company, Cooperative bank
- A non-banking financial company (NBFC)
- Any institution issuing credit card
- Any person covered under audit under section 44AB iof the Income Tax Act.
- Post offices
- A Nidhi referred to in section 406 of the Companies Act 2013
- A company issuing bonds or debentures
- A company issuing shares
- A mutual fund institution
- A company listed on the recognised stock exchange
- A trustee of a mutual fund or such other person as authorised by the trustee
- Authorise dealer, offshore banking unit, money changer or any other person defined in FEMA
- Inspector general or sub-registrar appointed under Registration act, 1908
Transactions to be reported in Form 61A
- Cash Payment for the purchase of Pay orders, demand drafts or for amounts annually totalling Rs.10 Lakh or Exceeding that.
- Deposit or withdrawals which amount to Rs.50 lakh or more from any number of current accounts of a person.
- Cash Payments which exceed Rs.10 Lakh for purchase of any Prepaid RBI instrument like the RBI bond, etc.
- Cash Payment aggregating Rs.1Lakh or more in a year or Rs.10 Lakh or more ina any other mode of payment against any credit card bill issued to any customer.
- Receipt which exceed Rs.10 Lakh or more in a year from an individual for obtaining such debentures and bonds.
- Receipt which exceed Rs.10 Lakhs in a year from an individual for obtaining such shares. It also includes the share application money.
- Buyback of Shares from a person for an amount of Rs.10 lakh or more.
- Receipt equal to or exceeding Rs.10 Lakh in a year from an individual acquiring such mutual fund.
- Receipt from a person for sale of foreign currency or expenses which are incurred in such foreign currency via debit/credit card or through issuing a draft or a traveller cheque or any other financial instrument for an amount which is annually 10 lakh or more.
- Sale purchase by a person of any immovable property for Rs.30 Lakhs or more of sale value or value as per the stamp valuation authority
- Cash receipt which exceed Rs. 2 Lakh by a person for sale of goods or providing services.
Filing Nil Statement
There is a confusion many people have that if an entity which has not entered in any of Specified Financial Transactions in a Financial year but falls under the class of persons as given under the provision of Income Tax Act. There are few notifications which are issued by CBDT (Central Board of Direct Taxation) on the same which has not cleared out this confusion. Although, the experts in this field say that NIl statement is not mandatory but for staying on the safer side an assessee can consider to file the Statement of Financial Transactions or Form 61A.
Filing of Statement of Financial Transactions (SFT) Online
- Step 1: Register on the Reporting portal.
- Step 2: All statements need to be uploaded on the Reporting Portal shall be in the XML format consistent with the prescribed format published by the Income Tax Department.
- Step 3: After generating the XML , sign and encrypt the XML using the Submission utility and prepare a package.
- Step 4: Submit the statement on Reporting Portal.
Different Parts of Form 61A
Form 61A has two parts:
- Part A contains statement level information and is common for all type of transactions.
- This Report Level Information is to be reported in one of the parts depending on the transaction type
- Part B (Reporting the Aggregated Financial Transactions)
- Part C (Reporting Bank Accounts)
- Part D (Reporting Immovable Property Transactions)
