S K and Associates
SFT Reporting Obligation
1. What is the
legal framework for reporting Statement of Financial Transactions (SFT)?
Section 285BA of
the Income Tax requires specified reporting persons to furnish statement of
financial transaction. Rule 114E of the Income Tax Rules, 1962 specifies that
the statement of financial transaction required to be furnished under
sub-section (1) of section 285BA of the Act shall be furnished in Form No. 61A.
2. Who is required
to file Statement of Financial Transactions (SFT)?
The following types of transactions must be reported on the Form 61A –
Statement of Financial Transactions. Most of the items reportable pertain to a
banking company. However, the following three are important transactions that
must be reported by a company or any person requiring tax audit:
1. Receipt from any person
of an amount aggregating to ten lakh rupees or more in a financial year for
acquiring bonds or debentures issued by the company or institution (other than
the amount received on account of renewal of the bond or debenture issued by
that company).
2. Receipt from any person
of an amount aggregating to ten lakh rupees or more in a financial year for
acquiring shares (including share application money) issued by the company.
3. Receipt of cash
payment exceeding two lakh rupees for sale, by any person, of goods or services
of any nature.
4. Buy back of shares from
any person (other than the shares bought in the open market) for an amount or
value aggregating to ten lakh rupees or more in a financial year.
3. What is the
periodicity and due date of furnishing statement of financial transaction?
The statement of
financial transactions (online return in Form No. 61A with digital signature)
shall be furnished on or before 31st of
May, immediately following the financial year in which the transaction is
registered or recorded
4. How can an
entity comply with reporting obligation?
To comply with
reporting obligation, the statements need to be filed by all reporting entities
in a prescribed format and within prescribed timeline. For FY 2018-19, the due
date for furnishing SFT is 31st
May 2019
5. Who needs to
file SFT?
Any person whether
proprietary concern (Individual) or any other entity liable for Audit Under
section 44AB need to file SFT – 013 (Cash payment for goods and services).
Please note that No Aggregation of transactions is to be done.
6. Consequences of
failure?
If reporting person does not furnish the SFT within original due date,
penalty of Rs. 500 per day of default. Further, if no report is furnished even
within the extended due date specified in the notice served upon the person,
penalty of Rs 1000 per day will be levied from the day immediately following
the day on which the specified time in the notice expires.
Post a Comment