For keeping a watch on the high-value transactions done by the taxpayers, the Income Tax Act has framed a new concept to furnish a Statement of Financial Transactions or reportable account, previously also known as Annual Information Return (AIR).
Section 285BA of the Income-Tax Act requires specified reporting persons to furnish this statement. Rule 114E of the Income Tax Rules 1962, specifies that this statement must be furnished in Form No. 61A.
The specified financial transactions referred above are of the following kinds:
It is important to note that CBDT can recommend different values with respect to different transactions for different persons by considering the nature of the transactions.
Statement of Financial Transactions needs to be furnished within 31st May of next year for every previous financial year where the transaction occurs.
A penalty under Section 271FA of Rs 500 per day shall be levied for the initial failure to file within the due date.
The authorities would issue a notice to such an assessee, demanding the assessee to submit the form within 30 days from the issuance of such notice.
In case such assessee continues to be the assessee in default by not answering to such notice, a penalty would be levied on the assessee that would amount to Rs 1000 per day of such default. This penalty would be calculated from the expiry of the period as stipulated in such notice.
|Individuals responsible for furnishing Form 61A||Type of Transaction and limit|
|Banking Companies and Co-operative Banks||Cash payment for the purchase of POs (Pay orders) / DDs (Demand drafts) for amounts annually totalling Rs 10 lakh or more.|
|Banking Companies and Co-operative Banks||Cash payment exceeding Rs 10 lakh for purchasing any prepaid RBI instruments like RBI bonds, etc.|
|Banking Companies and Co-operative Banks||Deposits or withdrawals amounting to Rs 50 lakh or more from any number of current accounts of a person with the bank.|
|Banking Companies, Co-operative Banks and Post Offices||Deposit totalling Rs 10 lakh or more in bank accounts, other than current or time deposit accounts, of a person.|
|Banking Company, Co-operative Bank, Post Master General of Post office, Nidhi||Cash payment aggregating to INR 1 lakh or more in a year or Rs 10 lakh or more in any other mode of payment against any credit card bill which is issued to a customer in a year|
|A company or an institution issuing debentures or bonds||Receipt exceeding Rs 10 lakh or more in a year from an individual for acquiring such debentures/bonds|
|A company issuing shares||Receipt exceeding INR 10 lakhs in a year from an individual for acquiring such shares. This includes share application money received.|
|Listed companies||Share buyback from a person for an amount totalling Rs 10 lakh or more|
|Manager/Trustee of a Mutual Fund||Receipt equal to or exceeding Rs 10 lakh in a year from an individual acquiring the units of such Mutual Fund|
|A Dealer of Foreign Exchange||Receipt from a person for sale of a foreign currency or expenses incurred in such foreign currency via a debit/credit card or via the issue of draft or traveller’s cheque or any other financial instrument for an amount annually totalling Rs 10 lakh or more.|
|Inspector-General/Sub-Registrar appointed under the Registration Act, 1908||Sale/Purchase by a person of immovable property for Rs30 lakhs or more of sale value or value as per the stamp valuation authority.|
|Persons liable for audit u/s 44AB of the Income Tax Act||Cash receipt exceeding Rs 2 lakh by a person for sale of goods or rendering of services (other than the ones specified above)|
There’s a dilemma many have that if an entity that hasn’t entered into any of Specified financial transactions in the financial year but falls into the reporting class of person as provided under the provisions of the Income Tax Act – Do they need to file a NIL Form 61A/Statement of financial transactions.
There have been few circulars issued by the CDBT (Central Board of Direct Taxation) on the same which somewhat hasn’t solved the dilemma, however, experts in the field recommend that Nil Statement is not mandatory but to stay on the safer side an assessee could consider filing the STF (Statement of Financial Transactions) or Form 61A
Form 61A has two parts: