SFT61A Income Tax

Introduction

Finance Act, 2003, first introduced the concept of furnishing of statements by companies bringing in Section 285BA w.e.f from 1st April’ 2004, and was named as ‘Annual Information Return”. 

The same was introduced to facilitate the collection of information by the Central Information Branch (CIB) relating to financial transactions.

Before the introduction of section 285BA, there were several hurdles in the collection of information by CIB, and often the coverage sources were incomplete. Section 285BA was introduced with the intent to provide a mechanism wherein the flow of information regarding the material financial transactions entered into by a taxpayer with other persons is automatic so that the same can be utilized for widening and deepening of the tax base.

Section 285BA further got substituted by later Finance Acts and was last amended by Finance Act, 2014 naming it as “Obligation to furnish Statement of Reporting Financial transaction or Reportable Account.”

After that, the Government, with its Notification No. 95/2015[F.No.142/28/2012-(SO)TPL] dated 30th December 2015, introduced Rule 114E detailing the reportable persons and transactions in respect of which they are required to furnish such statements. However, the applicability of such Rule 114E was made prospective from 1st April 2016.

What is FORM 61A Income Tax

WHO SHOULD FILE FORM 61A

To file Statement of Financial Transactions (SFTs) Online in Form No. 61A for specified financial transactions entered with third parties during F.Y. 

IF YOU ARE:-

•  Sub-registrar
• A Cooperative Bank
• A Banking Company
• NBFC
• Nidhi
• Post-Master General
• The issuer of Bonds/debentures/shares
• Trustee of Mutual Funds or Managing the Affairs of Mutual Fund
• Foreign Exchange Dealer
• Supplier of Goods or Services (whose accounts are required to be audited U/s. 44AB of the Income Tax Act, 1961)

then you are required to file an online statement of Specified Financial Transactions (SFT) in Form No.61A for these transactions entered with third parties during F.Y. 2017-18

Table explaining transaction limits

Please Note-

For delay in filing SFT, you are liable for penalty up to Rs. 1000/- for each day of default.

Filing inaccurate statements may also lead to levy of penalty.

FORM 61A and its contents;-

The rules have clarified that reporting of specified transactions shall be furnished in Form 61A[4]. The prescribed schema for Form 61A and a utility to prepare Form 61A XML file can be downloaded from the e-filing website home page. The form has been divided into four segments – Part A contains statement level information is common to all transaction types. The other three parts relate to reporting level information, which has to be reported in one of the following sections (depending on the transaction type), Part B (Person Based Reporting), Part C (Account-Based Reporting), Part D (Immovable Property Transaction Reporting.

Overview of FORM 61A – Click here to download pdf

Time of submitting the FORM 61A:-

Form 61A needs to be submitted every year by 31st May of the year following the reporting period. For instance, if the period of reporting where the transactions relate to FY 2017-18, the form needs to be filled by 31st May 2018. The return in Form No. 61A shall be furnished to the DIT (I & CI) or Jt. DIT (I & CI) through the online transmission of digitally signed electronic data.

The income tax department, vide notification no 42/2017[F.No.370 142/17/2017-TPL]/GSR 546(E)[5] dated 2nd June 2017, has extended the due date for current year filing requirement to 31st June 2017.

Penalty for failure to furnish statement of financial transaction:-

In respect of stringent conditions laid down in Section 271FA of the I.T. Act, NBFCs need to be cautious and carefully analyze the different transactions for the applicability of reporting.

Section 271FA of the I.T. Act lays down the penalty for the non-compliance of the reporting requirements. Where a person who is required to furnish a Statement of Reportable Transaction fails to provide the same by the due date, the income tax authority can impose a penalty @ Rs 100/day of default.

Nature of Transaction needs to be reported.

 Following Transactions needs to be reported in Form 61A: –

SFT- 001: Purchase of bank drafts or pay orders in Cash: – 

A Banking Company or a Cooperative Bank or any Banking Company on which Banking Regulation Act 1949 applies shall be liable to report any Payment made to A Banking Company or a Cooperative Bank or any Banking Company in Cash for purchase of Bank Draft or Pay Order or Banker’s Cheque for an aggregate amount Rs. 10 Lakh or More in Financial Year.

SFT- 002: Purchase of pre-paid instruments in Cash: – A Banking Company or a Cooperative Bank or any Banking Company on which Banking Regulation Act 1949 Applies shall be liable to report Any Payment made to A Banking Company or a Cooperative Bank or any Banking Company in Cash for purchase of Prepaid Instrument issued by Reserve Bank of India for an aggregate amount Rs. 10 Lakh or More in Financial Year.

 SFT- 003: Cash deposit in current account: – A Banking Company or a Cooperative Bank or any Banking Company on which Banking Regulation Act 1949 applies shall be liable to report any Cash Deposit made by any person in his or her one or more Current Accounts an aggregate amount Rs. 50 Lakh or More in Financial Year.

 SFT- 004: Cash deposit in account other than current account: – A Banking Company or a Cooperative Bank or any Banking Company on which Banking Regulation Act 1949 applies shall be liable to report any Cash Deposit made by any person in his or her one or more Accounts other than an aggregate amount Rs. 10 Lakh or More in Financial Year.

 SFT- 005: Time deposit: – A Banking Company or a Cooperative Bank or any Banking Company on which Banking Regulation Act 1949 applies liable to report any Cash Deposit made by any person in his or her one or more Term Deposit Accounts an aggregate amount Rs. 10 Lakh or More in Financial Year.

SFT- 006: Payment for a credit card: –

A Banking Company or a Cooperative Bank or any Banking Company on which Banking Regulation Act 1949 Applies shall be liable to report; 

• any Payment made to A Banking Company or a Cooperative Bank or any Banking Company in Cash for an aggregate amount Rs. 1 Lakh or More in Financial Year against one or more bill raised for Credit Card issued to such person
•  And in other than Cash for an aggregate amount Rs.10 Lakh or More in Financial Year against one or more statement built for Credit Card issued to such person.

 SFT- 007: Purchase of debentures: – Any Company or Institution issuing bonds or debentures shall be liable to report Transaction of Receipt in Cash an aggregate amount Rs. 10 Lakh or More in Financial Year from any person for acquiring bond or debentures.

SFT- 008: Purchase of shares: – Any Company or Institution issuing shares shall be liable to report Transaction of Receipt in Cash an aggregate amount Rs. 10 Lakh or More in Financial Year from any person for acquiring Shares by such person.

 SFT- 009: Buyback of shares: – Any Company listed on a recognized stock exchange its securities under sec 68 of Companies Act 2013 shall be liable to report Transaction of Receipt in Cash an aggregate amount Rs. 10 Lakh or More in Financial Year from any person for buyback of shares from such person.

SFT- 010: Purchase of mutual fund units: – A trustee of a Mutual Fund or any other person authorized by the trustee for managing the affairs of the Mutual Fund shall be liable to report Transaction of Receipt in Cash an aggregate amount Rs. 10 Lakh or More in Financial Year from any person for acquiring one or more scheme of Mutual Fund by such person.

 SFT- 011: Purchase of foreign currency: – Any Authorized Person under Sec 2(c) of Foreign Exchange Management Act 1999 shall be liable to report Transaction of Receipt in Cash an aggregate amount Rs. 10 Lakh or More in Financial Year by any person for sale of Foreign Currency by such person.

SFT- 012: Purchase or sale of immovable property: – Any Inspector General appointed under sec 3 of Registration Act 1908 or any sub Inspector appointed under sec 6 of Registration Act 1908 shall be liable to Report any Purchase or Sale of Immovable property an aggregate amount Rs. 30 Lakh or More in Financial Year.

 SFT- 013: Cash payment for goods and services: – Any Person who’s Books of Accounts are liable to get Audited under Sec 44AB of Income Tax Act shall be responsible for reporting any receipt of an aggregate amount Rs. 2 Lakh or More in Financial Year against the sale of goods or service by such person.

 SFT- 014: Cash deposits during the specified period: – : – A Banking Company or a Cooperative Bank or any Banking Company on which Banking Regulation Act 1949 applies shall be liable to report any Cash Deposit made by any person in his or her one or more account during any specified period prescribed such as Demonetization period.

 Conclusion:-

Filling of SFT is a very crucial part all the transactions and sum must be adequately prepared, and then the whole form must be filled. Even though oneself can do it, it is highly recommended to do it through expert as having complete accounts ready is a prerequisite for the same.

Here at Consultaxx, we have experts having experience of 15 years and more and have robust expertise in tax filling. Feel free to file SFT or ask any related questions online anytime.

Official notification by Income Tax Department for reporting – Check here

Also read our other blog – Income Tax In India And 5 Income Heads, GST Registration in Pune