File Statement of Financial Transactions (Form 61A) by 31st May 2018

Finance Act, 2003 first introduced the concept of furnishing of statements by companies bringing in Section 285BA wef from 1stApril’ 2004, and was named as ‘Annual Information Return”. The same was introduced to facilitate the collection of information by 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 was incomplete. Section 285BA was introduced with the intent to provide a mechanism wherein flow of information regarding the material financial transactions entered into by a taxpayer with other persons is automatic so that the same can be utilised 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.”

Thereafter Government with its Notification No. 95/2015[F.No.142/28/2012-(SO)TPL][2] dated 30th December 2015 introduced Rule 114E[3] 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.

Section 285BA of the Income Tax Act 1961 (IT Act) lays down the obligation of certain specified persons who are required to submit information of those high value transactions registered or recorded by them during the financial year as specified in the rules. It further provides guidelines for the reporting person and reportable transactions for which the statements need to be submitted.

DON’T MISS THE DEAD LINE of 31st May 2018 to file Statement of Financial Transactions (SFTs) Online in Form No. 61A for specified financial transactions entered with third parties during F.Y. 2017-18

IF YOU ARE:-

  • Sub-registrar
  • A Cooperative Bank
  • A Banking Company
  • NBFC
  • Nidhi
  • Post Master General
  • 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 online statement of Specified Financial Transactions (SFT) in Form No.61A for these transactions entered with third parties during F.Y. 2017-18[table id=58 /]

Please Note-

  • For delay in filing SFT, you are liable for penalty upto Rs. 1000/- for each day of default.
  • Filing inaccurate statement 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 report level information which has to be reported in one of the following parts (depending on the transaction type), Part B (Person Based Reporting), Part C (Account Based Reporting), Part D (Immovable Property Transaction Reporting.

Time Period of submitting the form:-

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 online transmission of digitally signed electronic data.

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 IT Act, NBFCs need to be cautious and carefully analyse the different transactions for the applicability of reporting.

Section 271FA of the IT 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 furnish 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

As Per Sec 285BA of Income Tax Act specified reporting person liable to report or furnish Statement of Financial Transaction. 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 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 bill raised 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: Buy back of shares: - Any Company listed on a recognized stock exchange its own 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 get Audited under Sec 44AB of Income Tax Act shall be liable to report any receipt of an aggregate amount Rs. 2 Lakh or More in Financial Year against sale of goods or service by such person.

 SFT- 014: Cash deposits during 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 prepared properly and then whole form must be filled. Even though it can be done by one self it is highly recommended to do it through expert as having whole accounts ready is a prerequisite for the same.

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

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