Income Tax News: The Statement of Financial Transactions (SFT), also known as Form 61A in India, was created under the Income Tax Act to track high-value transactions conducted by taxpayers. The Statement of Financial Transactions (SFT) submission date for the Financial Year (FY) 2023–2024 is quickly approaching, as the Income Tax department has reminded.
Understanding SFT and Form 61A
The Income Tax Department uses SFT, or Form 61A, as a crucial instrument to monitor important financial transactions. In order to enable tax authorities spot possible inconsistencies and guarantee compliance, it mandates that certain reporting businesses provide information about a range of transactions.
Specified Financial Transactions Covered
Form 61A covers a broad variety of financial operations, such as:
- Sale, purchase, or exchange of goods, rights, properties, or interests therein.
- Engaging in works contracts.
- Providing services.
- Making investments or incurring expenditures.
- Accepting deposits or obtaining loans.
Deadline Reminder for FY 2023-24
For each financial year in which the transactions take place, taxpayers are required to file their Statement of Financial Transactions by May 31st of the following year. Penalties under Section 271FA of the Income Tax Act apply for noncompliance.
Penalties for Non-Compliance from Income Tax Department
If Form 61A is not filed before the deadline, there is a 500 rupee fine each day. The taxpayer has 30 days after getting a notification from the authorities to correct the omission. Penalties for noncompliance with the notification are 1000 rupees each day until they are paid.
Who have to File SFT or Form 61A?
Several entities are mandated to submit Form 61A, including:
- Banking companies and cooperative banks.
- Non-banking financial companies (NBFCs).
- Institutions issuing credit cards.
- Entities subjected to audit under Section 44AB of the Income Tax Act.
- Post offices.
- Nidhis as per the Companies Act 2013.
- Companies issuing bonds, debentures, or shares.
- Mutual fund institutions and listed companies on recognized stock exchanges.
- Trustees of mutual funds or their authorized representatives.
- Authorized dealers, offshore banking units, and money changers.
- Inspectors general or sub-registrars appointed under the Registration Act, 1908.
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