Form 61A–Statement of Specified Financial Transactions (SFT)

Form 61A – Statement of Specified Financial Transactions (SFT)

For keeping a watch on the high-value transactions done by the taxpayers, the Income Tax Act has framed a new concept to furnish a Statement of Financial Transactions or reportable account, previously also known as Annual Information Return (AIR).

Section 285BA of the Income-Tax Act requires specified reporting persons to furnish this statement. Rule 114E of the Income Tax Rules 1962 specifies that this statement must be furnished in Form No. 61A.

Which are the Specified Financial Transactions?

The specified financial transactions referred above are of the following kinds:

  1. Sale, purchase or exchange of goods, right, property, or interest in any property.
  2. Works contract.
  3. Providing services.
  4. Any investment made or expenditure incurred.
  5. Accepting any deposit or taking any loan.

It is important to note that CBDT can recommend different values with respect to different transactions for different persons by considering the nature of the transactions.

Due Date to File Form 61A

Statement of Financial Transactions needs to be furnished within 31st May of next year for every previous financial year where the transaction occurs.

A penalty under Section 271FA of Rs 500 per day shall be levied for the initial failure to file within the due date. 

The authorities would issue a notice to such an assessee, demanding the assessee submit the form within 30 days from the issuance of such notice. 

If such assessee continues to be the assessee in default by not answering to such notice, a penalty would be levied on the assessee that would amount to Rs 1000 per day of such default. This penalty would be calculated from the expiry of the period as stipulated in such notice.

Who is required to furnish Form 61A

  1. A banking company, Cooperative bank
  2. A non-banking financial company (NBFC)
  3. Any institution issuing credit card
  4. Any person covered under audit under section 44AB of the Income Tax Act.
  5. Post offices
  6. A Nidhi referred to in section 406 of the Companies Act 2013
  7. A company issuing bonds or debentures
  8. A company issuing shares
  9. A mutual fund institution
  10. A company listed on the recognised stock exchange 
  11. A trustee of a mutual fund or such other person as authorised by the trustee
  12. Authorise dealer, offshore banking unit, money changer or any other person defined in FEMA
  13. Inspector general or sub-registrar appointed under Registration act, 1908

Transactions to be reported in Form 61A

Individuals responsible for furnishing Form 61A

Type of Transaction and limit

Banking Companies and Co-operative Banks

Cash payment for the purchase of POs (Pay orders) /DDs (Demand drafts) for amounts annually totalling Rs 10 lakh or more.

Banking Companies and Co-operative Banks

Cash payment exceeding Rs 10 lakh for purchasing any prepaid RBI instruments like RBI bonds, etc.

Banking Companies and Co-operative Banks

Deposits or withdrawals amounting to Rs 50 lakh or more from any number of current accounts of a person with the bank.

Banking Companies, Co-operative Banks and Post Offices

Deposit totalling Rs 10 lakh or more in bank accounts, other than current or time deposit accounts, of a person.

Banking Company, Co-operative Bank, Post Master General of Post office, Nidhi

Cash payment aggregating to INR 1 lakh or more in a year or Rs 10 lakh or more in any other mode of payment against any credit card bill which is issued to a customer in a year

A company or an institution issuing debentures or bonds

Receipt exceeding Rs 10 lakh or more in a year from an individual for acquiring such debentures/bonds

A company issuing shares

Receipt exceeding INR 10 lakhs in a year from an individual for acquiring such shares. This includes share application money received.

Listed companies

Share buyback from a person for an amount totalling Rs 10 lakh or more

Manager/Trustee of a Mutual Fund

Receipt equal to or exceeding Rs 10 lakh in a year from an individual acquiring the units of such Mutual Fund

A Dealer of Foreign Exchange

Receipt from a person for sale of a foreign currency or expenses incurred in such foreign currency via a debit/credit card or via the issue of draft or traveller’s cheque or any other financial instrument for an amount annually totalling Rs 10 lakh or more.

Inspector-General/Sub-Registrar appointed under the Registration Act, 1908

Sale/Purchase by a person of immovable property for Rs30 lakhs or more of sale value or value as per the stamp valuation authority.

Persons liable for audit u/s 44AB of the Income Tax Act

Cash receipt exceeding Rs 2 lakh by a person for sale of goods or rendering of services (other than the ones specified above)

  


 Filing Nil Statement

There’s a dilemma many have that if an entity that hasn’t entered into any of Specified financial transactions in the financial year but falls into the reporting class of person as provided under the provisions of the Income Tax Act – Do they need to file a NIL Form 61A/Statement of financial transactions. 

There have been few circulars issued by the CDBT (Central Board of Direct Taxation) on the same which somewhat hasn’t solved the dilemma; however, experts in the field recommend that Nil Statement is not mandatory but to stay on the safer side, an assessee could consider filing the SFT (Statement of Financial Transactions) or Form 61A.

Filing of Statement of Financial Transactions (SFT) Online

  1. Register on the Reporting portal under My Account menu.
  2. All statements uploaded to the Reporting Portal should be in the XML format consistent with the prescribed schema published by the Income Tax Department.
  3. Once XML is generated, sign and encrypt the XML using the Submission utility and prepare a package to be uploaded.
  4. Submit the statement on Reporting Portal.
  5. Upon successful submission, an email with “Acknowledgment Number” will be sent to the registered email id.

Different Parts of Form 61A

Form 61A has two parts: 

  1. Part A, which contains statement level information, is common for all transaction types. 
  2. The report level information has to be reported in one of the following parts (depending on the transaction type): –
  3. Part B (Reporting of aggregated financial transactions by the person) 
  4. Part C (Reporting of bank accounts) 
  5. Part D (Reporting of immovable property transactions)





For more information on this visit www.taxaj.com.

Posted by Pooja
Team Taxaj


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