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Reporting of SFT (Specified Financial Transactions) by Reporting Entity under Income Tax-Form 61A
Reporting of SFT (Specified Financial Transactions) by Reporting Entity under Income Tax-Form 61A
SFT (Specified Financial Transactions) is governed under Section 285BA of the Income Tax Act, 1961 and Rule 114E of the Income Tax Rules, 1962. It requires certain entities to report high-value transactions to the Income Tax Department.
1. Section 285BA – Obligation to Furnish Statement of Financial Transactions (SFT)
1. Section 285BA – Obligation to Furnish Statement of Financial Transactions (SFT)
This section mandates that specified entities must report high-value transactions that are above certain thresholds.
The purpose is to prevent tax evasion by tracking large transactions.
2. Rule 114E – Transactions Required to be Reported
2. Rule 114E – Transactions Required to be Reported
Entities like banks, financial institutions, and other specified persons must file Form 61A to report SFTs.
List of High-Value Transactions (SFT) and Reporting Authorities:
3. Due Date for Filing SFT (Form 61A)
3. Due Date for Filing SFT (Form 61A)
May 31 of the following financial year.
4. Penalty for Non-Compliance
4. Penalty for Non-Compliance
Failure to file Form 61A: ₹500 per day of delay (Section 271FA).
Incorrect or incomplete filing: ₹50,000 (Section 271FAA).
5. Why is SFT Important?
5. Why is SFT Important?
The Income Tax Department uses SFT to track tax evasion.
If high-value transactions do not match the taxpayer's declared income, scrutiny or notices may be issued.
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