The Annual Information Return (AIR) Scheme, which began on April 1, 2004, mandated certain entities to report specific transactions to the Income Tax Department (ITD). With the amendment of Section 285BA of the IT Act on April 1, 2015, designated individuals must now provide a Statement of Financial Transaction or a reportable account. Rule 114D of the IT Rules 1962 requires the details of Form 60 to be included in Form 61. Rule 114E outlines the type and value of transactions that must be reported.
A Reporting Entity or Reporting Person is responsible for submitting a Statement of Financial Transaction (Form 61A) or a Statement of Reportable Account (Form 61B) to the Income Tax Department, as mandated by Section 285BA of the Income-tax Act 1961. Additionally, under Rule 114D of the IT Rules 1962, any entity or individual receiving Form 60 is obliged to report its details using Form 61. The transaction that are reportable and the entities who has to report are as follows:
| Sl. No. | Nature and Value of Transaction | Who Needs to Report |
| 1 | (a) Cash payments of ₹10 lakh or more in a year for bank drafts, pay orders, or banker’s cheques. b) Cash payments of ₹10 lakh or more in a year for pre-paid instruments from RBI. (c) Cash deposits or withdrawals of ₹50 lakh or more in a year from one or more current accounts. | Banks or cooperative banks covered by the Banking Regulation Act, 1949. |
| 2 | Cash deposits of ₹10 lakh or more in a year in accounts other than current or time deposits. | Banks, cooperative banks, and the Post Master General. |
| 3 | Time deposits of ₹10 lakh or more in a year, excluding renewals of other time deposits. | Banks, cooperative banks, the Post Master General, Nidhi companies, and registered non-banking financial companies. |
| 4 | Payments for credit card bills of: ₹1 lakh or more in cash; or ₹10 lakh or more by any other method, in a year. | Banks, cooperative banks, or any company issuing credit cards. |
| 5 | Receipts of ₹10 lakh or more in a year for bonds or debentures (excluding renewals). | Companies or institutions issuing bonds or debentures. |
| 6 | Receipts of ₹10 lakh or more in a year for shares (including share application money). | Companies issuing shares. |
| 7 | Buyback of shares for ₹10 lakh or more in a year (excluding open market purchases). | Companies listed on a recognised stock exchange. |
| 8 | Receipts of ₹10 lakh or more in a year for acquiring units of mutual fund schemes (excluding transfers between schemes). | Trustees or managers of mutual funds. |
| 9 | Receipts of ₹10 lakh or more in a year from sales of foreign currency (including credits to foreign exchange cards, expenses through debit/credit cards, or other instruments). | Authorised persons under the Foreign Exchange Management Act, 1999. |
| 10 | Purchase or sale of immovable property for ₹30 lakh or more, or valued at ₹30 lakh or more by the stamp valuation authority. | Registrars or Sub-Registrars under the Registration Act, 1908. |
| 11 | Cash payments over ₹2 lakh for sales of goods or services. | Persons liable for audit under section 44AB of the Act. |
| 12 | Cash deposits from 9th Nov 2016 to 30th Dec 2016 of: ₹12.5 lakh or more in current accounts; or ₹2.5 lakh or more in other accounts. | Banks, cooperative banks, and the Post Master General. |
| 13 | Cash deposits from 1st Apr 2016 to 9th Nov 2016 in accounts reportable under Sl. No. 12. | Banks, cooperative banks, and the Post Master General. |
Additional Information of Prefiling Income tax return
The following entities now report certain transactions to make filing income tax returns easier. This change was made by the Income-tax (Fourth Amendment) Rules, 2021, so that both residents and NRIs can easily track their transactions throughout the year. Often, people miss reporting transactions involving mutual funds, shares, and dividend income, especially if the amounts are small. To address this, the income tax department requires the following entities to report transactions related to mutual funds, listed shares, dividend income, and interest income. The details are provided in the table below:
| Sl. No. | Nature of Transaction | Class of Person (Reporting Person) |
| 1 | Capital gains on transfer of listed securities or units of Mutual Funds | Recognised Stock Exchange Depository as defined in the Depositories Act, 1996Recognised Clearing Corporation Registrar to an issue and share transfer agent registered under the Securities and Exchange Board of India Act, 1992 |
| 2 | Dividend income | A company |
| 3 | Interest income | Banking company or co-operative bank under the Banking Regulation Act, 1949Post Master General under the Indian Post Office Act, 1898 Non-banking financial company with registration under the Reserve Bank of India Act, 1934 |
Due Date of Filing SFT
You need to submit the statement of financial transactions (SFT) for the financial year in Form No. 61A as required by section 285BA(1) of the Act. It must be verified as instructed in the formfs The deadline to file the SFT for the FY 2023-24 is May 31st, 2024.
Penalty on late filing of SFT
If you miss this deadline, you may face a penalty of up to ₹1000 for each day of delay. Not filing or providing inaccurate information may also result in penalties. Make sure to submit your SFT by the due date.
FAQs on SFT
1. Who is a Reporting Entity?
A Reporting Entity is an organization or person required to provide either a Statement of Financial Transaction (Form 61A) or a Statement of Reportable Account (Form 61B) to the Income Tax Department under section 285BA of the Income-tax Act 1961. Also, according to Rule 114D of the IT Rules 1962, any entity or person receiving Form 60 must report its details using Form 61.
2. What are the Reporting Obligations under section 285BA of the IT Act?
Since April 1, 2004, specific entities have been mandated to report certain transactions to the Income Tax Department (ITD) under the Annual Information Return (AIR) Scheme. With the amendment to Section 285BA on April 1, 2015, designated individuals now need to furnish either a Statement of Financial Transaction or a reportable account. Rules 114D, 114E, 114F, 114G, and 114H outline the requirements and procedures for reporting.
Forms Overview
- What are the different forms for third-party reporting under section 285BA?
There are three forms: Form 61, 61A, and 61B.
- Form 61: For details of Form 60 submitted by parties without PAN.
- Form 61A: For Statement of Financial Transactions (SFT).
- Form 61B: For Statement of Reportable Accounts (SRA).
- What is Form 61?
Form 61 is used to report details of Form 60 when the transacting party doesn’t have a PAN. It must be filled for the periods April 1st to September 30th and October 1st to March 31st of each financial year.
- What is Form 61A?
Form 61A is for Reporting Entities to submit the Statement of Financial Transaction (SFT) by May 31st following the financial year.
- What is Form 61B?
Form 61B is required for reporting under FATCA (Foreign Account Tax Compliance Act) and CRS (Common Reporting Standard) and must be filed by May 31st after the end of the calendar year.
Reporting Portal
- What is Reporting Portal?
The Reporting Portal is an online platform for Reporting Entities to register and submit statements to the Income Tax Department.
- What are the enhancements in the Reporting Portal?
The Reporting Portal offers improved data processing, encryption for security, better information exchange, comprehensive resources for capacity building, compliance management, and dedicated helpdesk support.
- How can the Reporting Portal be accessed?
Users can access the Reporting Portal by entering the URL https://report.insight.gov.in and valid credentials provided by the Income Tax Department.
- Who can access the Reporting Portal?
Access to the Reporting Portal is role-based, allowing the principal officer of the Reporting Entity and authorized personnel to log in and fulfill reporting obligations.
