INTRODUCTION

Statement of Financial Transactions (SFT) is a record of the statement of specified financial transactions which are to be furnished under Section 285BA of the Income Tax Act, 1961. Rule 114E of the Income Tax Rules, 1962  requires Statement of Financial Transactions to be furnished in Form No. 61A.

FORMS USED FOR FURNISHING SFT

Form 61 has two parts:

SFT is submitted through the following procedure:

• If already registered in the e-filing portal, login and manage My Account> ITDREIN (Income Tax Department Reporting Entity Identification Number)
• Click on ‘Generate New ITDREIN’
• Select the form type and the reporting entity category and click on ‘Generate ITDREIN’
• Based on this option, the appropriate ITDREIN will be generated and confirmation email and SMS will be sent to the registered email id and mobile number respectively
• Created ITDREIN Now Manage My Account> ITDREIN
• E-File> Upload Form ‘X’ (Appropriate Form Number will appear based on the selection made during registration)
• Verify PAN, Form Name, FY, Reporting Entity Category, Half Year, Upload Type i.e. Original / Correction Form / Nil Statement.
• After successful verification of the above details, upload the file along with the digital signature certificate.
• A successful message will be displayed on the screen in a successful upload and confirmation email and an SMS will be sent to the registered email id and mobile number.
• Uploaded files can be 'accepted' or 'rejected'. In case of rejection, the reason for rejection is mentioned and the correction form is submitted by the above procedure.

DUE DATE FOR FURNISHING SFT

• The due date of filing the SFT transaction in Form 61A is 31st May, immediately following the financial year in which the transaction is registered or recorded. Example: For the FY 2019-20 the due date will be 31st May 2020.
• The report of the reportable account in Form 61B is submitted by the reporting financial institution on or before May 31 of the following year for each calendar year.

REMEDY FOR DEFECT IN FURNISHING SFT

If the SFT related to the income-tax authority filed is deficient, the reporting entity/person will be notified by the same authority and will have the opportunity to rectify the error within 30 days from such date. This deadline for correcting the default may be further extended at the discretion of the Income Tax Authority on the application made by the entity/person on this behalf. However, if the error is not corrected within 30 days or during such an extended period, such statement shall be deemed invalid and the consequences of not filing SFT shall apply.

CONSEQUENCES FOR FAILURE TO FURNISH SFT

As per section 271FA, if the reporting person does not submit the SFT by the actual due date (i.e 31st May of nest FY), then Rs. 500 per day by default will be charged. In addition, if no report is filed even after the extended expiry date mentioned in the notice given to the person, a penalty of Rs.1000 / - per day will be levied from the day following the expiry date of the time specified in the notice.
In total, a penalty of Rs.500 / - per day from the date of expiration of the notice will be charged.

CONSEQUENCES OF FAILURE TO CORRECT INACCURATE OR DEFECTIVE SFT