Expansion of SFT Reporting beyond High-Value Transactions
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- Last Updated on 3 May, 2021
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Statement of Financial Transaction provides a reporting mechanism wherein specified entities are required to provide information about material financial transactions to the Income-tax Dept. Earlier, only High-Value transactions were required to be reported in SFT. To enable pre-filling of return of income, the Finance Minister, while presenting the Union Budget 2021, mentioned that to ease filing of returns of income (ITR), details of capital gains from listed securities, dividend income, and interest from banks, post office, etc. earned by the taxpayer during the year will be pre-filled in his ITR.
To enable such pre-filling of return of income, CBDT has expanded the scope of SFT vide Notification No. 16/2021, dated 12-03-2021. Now, the following information is also required to be reported irrespective of the amount for which it is undertaken:
| Nature of transaction | Reporting person |
| Capital Gains on the transfer of securities listed on any recognised stock exchange in India | Recognized Stock Exchange;
Depository defined in section 2(1)(e) of Depositories Act, 1996; Recognised Clearing Corporation; Registrar to an issue and share transfer agent registered under section 12(1) of the SEBI Act, 1992. |
| Capital Gains on the transfer of Units of Mutual Funds | Recognised Stock Exchange;
Depository as defined in section 2(1)(e) of Depositories Act, 1996; Recognised Clearing Corporation; Registrar to an issue and share transfer agent registered under section 12(1) of the SEBI Act, 1992. |
| Dividend income (Final or Interim) | A Company |
| Deemed Dividend as referred to under Section 2(22)(a) to 2(22)(e) | A Company |
| Interest income | A Banking company or a Co-op. Bank;
Post-Master General; NBFCs |
Dividend and Interest Income
In respect of dividend and interest, CBDT[1] has provided that statement shall be furnished on or before the 31st May of the financial year immediately following the financial year in which the transaction is registered or recorded.
Such statement shall be signed, verified, and furnished by the specified Designated Director. Where the reporting person is a non-resident, the statement may be signed, verified, and furnished by a person who holds a valid power of attorney from such Designated Director.
Further, reporting entities are advised to provide information of dividend and interest income, reported to Income Tax Department, to the taxpayers, which will enable them to reconcile the information displayed in the Annual Information Statement (AIS).
Capital Gains
In respect of capital gains, CBDT[2] has provided that SFT relating to Financial Year 2020-21 shall be furnished on or before 31-05-2021. Thereafter, SFT in relation to transactions in nature of capital gains shall be furnished by the following due dates:
| Quarter ending on | Due date of SFT |
| 30th June (1st Quarter) | 25th July |
| 30th September (2nd Quarter) | 25th October |
| 31st December (3rd Quarter) | 25th January |
| 31st March (4th Quarter) | 25th April |
Reporting entities are required to provide information reported to Income Tax Department to the account holder, which will enable them to reconcile the information displayed in the Annual Information Statement (AIS).
A separate control statement is required to be signed, verified, and furnished by the Designated Director.
Revision of SFT
If the reporting person or entity comes to know or discovers any inaccuracy in the information provided in the statement or the defects have been communicated to the reporting person or entity, it is required to remove the defects by submitting a correction or deletion statement.
Penalty for failure to furnish SFT
In case an assessee fails to furnish SFT, he shall be liable for payment of penalty as follows:
| Status of filing | Furnished inaccurate particulars | Revised statement filed within time to rectify the error | Penalty |
| Statement not filed, and no notice has been issued by the authorities | – | – | Rs. 500 per day of default |
| Statement not filed even in response to notice issued by the authorities | – | – | Rs. 1,000 per day of default (to be levied from the day on which period specified in notice expires) and Rs. 500 per day from the due date till the date specified in the notice |
| Statement filed within 30 days in response to notice issued by the authorities | – | – | Rs. 500 per day of default (to be levied for the period of delay in filing of such statement) |
| Statement filed voluntarily | Yes | No | Rs. 50,000 |
| Statement filed voluntarily | Yes | Yes | – |
[1] Notification No. 1 OF 2021 [DGIT(S)/ADG(S)2/Reporting Portal/2021/180], Dated 20-04-2021 and Notification No. 2 OF 2021 [DGIT(S)/ADG(S)2/Reporting Portal/2021/180], Dated 20-04-2021
[2] Notification No. 3 of 2021, dated 30-04-2021 and Notification 4 of 2021, dated 30-04-2021
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