SFT Filings
In its continuous endeavor to enhance tax transparency, widen the tax base, and curb unaccounted financial transactions, the Income Tax Department mandates the reporting of “Specified Financial Transactions” (SFTs). This crucial compliance requirement impacts various entities involved in high-value financial activities, requiring meticulous record-keeping and timely submission of specific reports. At Account Assure, a leading Financial Audit Firm, we provide comprehensive expertise in SFT filings, ensuring your company accurately identifies reportable transactions and adheres to all statutory obligations.
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What is an SFT (Statement of Financial Transaction)?
The Statement of Financial Transaction (SFT), formerly known as Annual Information Return (AIR), is a report that certain specified entities are required to submit to the Income Tax Department under Section 285BA of the Income Tax Act, 1961, read with Rule 114E of the Income Tax Rules, 1962. It details high-value financial transactions undertaken by taxpayers during a financial year.
The primary objective of SFT is to gather information about significant financial activities that may not otherwise be readily captured, thereby enabling the Income Tax Department to cross-verify income declarations, detect potential tax evasion, and promote voluntary compliance.
Specified Transactions Required to be Reported
Financial transactions specifically required to be reported under Section 285BA are as follows:
- Transaction of purchase, sale/exchange of goods or property or right or interest in a property
- Transaction for rendering any service
- Transaction under a works contract
- Transaction by way of an investment made or expenditure incurred
- Transaction for taking or accepting any loan or deposit
Forms to be Used for Furnishing SFT and the Procedure to Submit SFT
Due Date for SFT Filings
The Statement of Financial Transaction (SFT) in Form 61A must be furnished on or before May 31st immediately following the financial year in which the transaction is registered or recorded.
Penalties for Non-Compliance
Failure to file SFT, or filing an incorrect/incomplete statement, can attract significant penalties:
- Failure to Furnish SFT: A penalty of ₹500 per day for the period of default.
- Penalty after Notice: If a notice is issued by the Income Tax authority and the default continues, the penalty increases to ₹1,000 per day from the date mentioned in the notice, until the statement is furnished.
- Incorrect/Inaccurate SFT: A penalty of ₹50,000 can be levied for furnishing inaccurate information, or if the reporting person is aware of the inaccuracy and does not inform the authorities.
How Account Assure Ensures Flawless SFT Compliance:
As a trusted Financial Audit Firm, Account Assure offers specialized and comprehensive support to ensure your entity adheres to all SFT filing requirements
Transaction Identification & Analysis
- We meticulously analyze your financial data to identify all transactions that meet the SFT reporting thresholds.
- Guidance on the specific nature and value of transactions to be reported.
Data Collection & Validation
- Assistance in gathering all necessary information and documentation from your internal records.
- Thorough validation of data to ensure accuracy and consistency with your financial statements.
Form Preparation (Form 61A):
Expert preparation of Form 61A, ensuring all required fields are accurately populated and aggregation rules are correctly applied.
Timely E-Filing
- Prompt and secure online submission of the SFT to the Income Tax Reporting Portal within the statutory due date.
- Ensuring the use of a valid Digital Signature Certificate (DSC) for submission.
Reconciliation with AIS/TIS
- Helping you reconcile your internal records with the information visible in your Annual Information Statement (AIS) and Taxpayer Information Summary (TIS), which are based on SFTs filed by other entities.
Strengthen Your Tax Compliance, Ensure Transparency with Account Assure.
Don’t let the complexities of SFT filings expose your entity to penalties or scrutiny. Partner with Account Assure for reliable, accurate, and timely SFT compliance solutions. Our experienced team is dedicated to safeguarding your financial integrity and ensuring complete adherence to all tax regulations.
Contact us today for a consultation and secure your SFT compliance.
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