Statement of Financial Transaction or Reportable Account–SFTR


To keep a watch on high value transaction undertaken by the taxpayer, the Income Tax Law has developed the concept of “ Statement of Financial Transaction or Reportable account. Earlier it was known as “Annual Information Return (AIR). Income tax department with the help of this “SFTR” statement will collect information on certain prescribed high value transaction undertaken by a person during the year.

SFTR is required to filled by prescribed entities in such statement as specified by Income Tax Department:

Persons required to file statement of financial transaction or reportable account

(a) an assessee;

(b) the prescribed person in the case of an office of Government;

(c) a local authority or other public body or association;

(d) the Registrar or Sub-Registrar appointed under section 6 of the Registration Act, 1908 (16 of 1908);

(e) the registering authority empowered to register motor vehicles under Chapter IV of the Motor Vehicles Act, 1988 (59 of 1988);

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

(g) the Collector referred to in clause (g) of section 3 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (30 of 2013);

(h) the recognized stock exchange referred to in clause (f) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956);

(i) an officer of the Reserve Bank of India, constituted under section 3 of the Reserve Bank of India Act, 1934 (2 of 1934);

(j) a depository referred to in clause (e) of sub-section (1) of section 2 of the Depositories Act, 1996 (22 of 1996); or

(k) a prescribed reporting financial institutions

Transactions that are required to be reported :

The statement of financial transaction (SFTR) shall be furnished by every person mentioned in column (3) of the Table below in respect of all the transactions of the nature and value specified in the corresponding entry in column (2) of the below table:

Section 285BA read with Rule 114E of the Income Tax Act 1961 (w.e.f April 01, 2016)



Sr. No.

Nature of transactions

Reporting Entity

1

(a) 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.

(b) Cash payment for buying bank pre-paid instruments from RBI for an amount aggregating to Rs. 10 Lakhs or more in a financial year.

(c) Cash Deposits / Withdrawal in current account aggregating to Rs. 50 Lakhs or more in a financial year.

Banks, Co-operative Banks  Banking Regulation Act 1949.

2

Cash Deposits other than current account aggregating to Rs. 10 Lakhs or more in a financial year.

Banks, Co-operative Banks, Post Office.

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 exceeding Rs 2 Lakh

Any person who is liable for audit under section 44AB of the Act.

Please click here to know procedure for person who is liable for audit section under section 44AB.

12

Cash deposits during November 9, 2016 to December 30, 2016 aggregating 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, Post Master 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, Post Master General.

 

The periodicity and due date of furnishing statement of financial transaction or reportable account

The reporting person person will submit SFTR electronically (under digital signature) in Form No. 61A  along with the verification in Form-V on paper.

Information required to collect for preparation and filing of SFTR Form No 61 A

Further, the statement shall be furnished on or before 31st May immediately following the financial year in which the transaction is registered or recorded.

Section 285BA(5) of the Income Tax Act empower the tax authorities to issue a notice to the person who had not filed the statement within due date.

Consequences of not furnishing statement of financial transaction or reportable account:

Non furnishing of Statement of Financial Transaction or Reportable (SFTR) will attract penalty as per section 271FA. Penalty can be levied Rs. 100/- per day till the date of default.

Further more, section 285BA (5) of Income Tax Act empower the tax authorities to issue a notice to the person directing him to file the statement within a period not exceeding 30 days from the date of service of such notice. Upon upon notice a person is liable to furnish the SFTR within the time specified in the notice. If person fails to file the SFTR, then a penalty of Rs. 500/-  per day will be levied from the day immediately following the day on which the time specified in such notice for furnishing the statement expires.

Inaccurate or defective statement of financial transaction or reportable account:

If any person, after filing the statement, comes to know any inaccuracy in the information provided in the SFTR.  He shall inform such inaccuracy to the prescribed income tax authority within a period of ten days and furnish the correct information.

On the other hand, the income-tax authority may also intimate the defect to the person and give him an opportunity of rectifying the defect within a period of thirty days from the date of such intimation or within such extended period as may be allowed by prescribed income-tax authority.

However, if a person fails to rectify the defect within the said period than such SFTR shall be treated as an invalid statement. Further more,  then the provisions of Income Tax Act shall apply as if such person had failed to furnish the statement.

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