What Is SFT Compliance?
Statement of Financial Transaction is a report of the specified financial transactions of specified entities, including the prescribed financial entity. Those identified persons who report, retain or record such a specified financial transaction are subject to the burden of submitting Statement of Financial Transaction to the revenue tax authority or another designated authority or agency. Section 285BA of the Income-Tax Act requires specified reporting persons to submit this statement. Rule 114E of the Income Tax Rules 1962 states that this statement must be made in Form No. 61A.
aggregation rule
- All accounts of the same nature kept during the FY for that individual shall be taken into account.
- All transactions of the same nature reported in respect of that individual during the financial year shall be aggregated.
- In the event that the account is maintained or the transaction is recorded on behalf of more than one person as a joint account, assign the full value of the transaction or the aggregated value of all transactions to all persons.
Due Date of SFT Furnishing
Statement of Financial Transaction shall be submitted to Form 61A on or before 31 May of the FY, immediately after the FY in which the transaction is recorded or recorded. The due date for furnishing Statement of Financial Transactions is 31 May 2019* in the case of financial transactions recorded or registered in FY 2018-19.
The reporting account statement in Form 61B shall be presented by the prescribed reporting financial institution for each calendar year on or before 31 May of the following year.
Implications of failure to comply
Failure of SFT furnishings
In the event of failure to provide Statement of Financial Transaction within the due date, the prescribed revenue tax authority may notify the individual requesting it to provide Statement of Financial Transaction within a period not exceeding 30 days from the date of such notification and provide the declaration within the period stated in that notice.
The default liability is Rs. 500 a day if the reporting individual fails to supply the Statement of Financial Transaction during the initial due date. In addition, a penalty of Rs 1000 per day shall be imposed on the day immediately following the expiry of the time stated in the notice, in the absence of a report within the time limit set out in the notice given to the individual.
Inaccurate details in SFT
If someone who has submitted SFT comes to know or finds a mistake in the details provided in a document, the individual shall notify the revenue tax authority or a designated authority or department of the inaccuracy in that statement and shall supply the correct information within 10 days.
