Statement of Financial Transactions to be filed
- The Statement of Financial Transactions (SFT) is a reporting system under the Income Tax Act where specified entities (banks, financial institutions, registrars, etc.) report high-value transactions of taxpayers to the Income Tax Department. In summary It captures significant financial activities (like large deposits, property purchases, and investments). Helps the department track income vs. spending patterns. Powers systems like AIS (Annual Information Statement), TIS, and pre-filled ITRs. Enables data-driven risk assessment and automated scrutiny selection. and marks a shift from post-facto assessments to proactive compliance monitoring. In essence, SFT strengthens transparency, early detection of tax evasion, and seamless compliance through technology-driven reporting.
- SFT is a report of specified financial transactions by specified persons, including specified reporting of specified financial transactions. The income tax authority or another specified authority or agency must provide a statement of financial transactions from such specified persons who register, retain, or record such specified financial transactions.
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The income tax authority or another specified authority or agency must receive SFT from such specified persons who register, retain, or record such specified financial transactions. A report of specific financial transactions by specific parties, including a required reporting financial institution, is known as an SFT, or special financial transaction. The income tax authority or another specified authority or agency is required to receive SFT from such specified persons who record and maintain such specified financial transactions.
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There are certain kinds of transactions on which the Income Tax Department is especially aggressive at at the moment, and if anyone entered into such a transaction without having an authorised source, they could find themselves in serious trouble down the road. The Income Tax Department is constantly expanding the disclosures and reporting that it accepts. These transactions are referred to as Special Financial Transactions (SFT Reporting) under the Income Tax Act.
- The Statement of Financial Transactions must be submitted no later than the timeline. If the reporting person does not furnish the Statement of Financial Transactions within the original deadline, there is a penalty of INR 500 per day of default. Moreover, if the report is not submitted even by the extended deadline mentioned in the notice given to the person, a penalty of INR 1000 per day will be imposed starting on the day after the deadline mentioned in the notice has passed.
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SFT (Form 61A) – Applicability Table
Reporting Entity / Person Responsible When Reporting is Required Transactions to be Reported (Thresholds) Bank / Co‑operative Bank Cash deposits in a savings account Aggregate cash deposits ≥ INR 10 lakh during the FY Bank / Co‑operative Bank Cash deposits or withdrawals in the current account Aggregate cash deposits or withdrawals ≥ INR 50 lakh during the FY Bank / Co‑operative Bank Time Deposits (FD / RD) Aggregate deposits (excluding renewals) ≥ INR 10 lakh Bank / NBFC (Credit Card Issuer) Credit Card Payments Cash payments ≥ INR 1 lakh OR total payments ≥ INR 10 lakh in FY Post Office Time Deposits Aggregate deposits ≥ INR 10 lakh NBFC / Financial Institution Loan or deposit repayment in cash Cash repayment ≥ INR 10 lakh Company issuing Shares Receipt of Share Application Money Amount received ≥ INR 10 lakh from a person Company issuing Debentures / Bonds Issue of securities Amount received ≥ INR 10 lakh Listed Company Buy‑back of Shares Buyback amount ≥ INR 10 lakh Mutual Fund (AMC / Trustee) Investment in Mutual Fund units Investment amount ≥ INR 10 lakh Company / Institution issuing Bonds (including Govt./R Investment in bonds Amount received ≥ INR 10 lakh Authorised Dealer / Money Changer Foreign exchange transactions Purchase or sale of foreign currency ≥ INR 10 lakh Registrar / Sub‑Registrar Purchase or sale of Immovable Property Transaction value ≥ INR 30 lakh OR stamp duty value > INR 30 lakh Inspector General (Registration) Reporting of property registration Same as above (≥ INR 30 lakh) Any person liable for audit u/s 44AB Cash sale of goods or services Receipt ≥ INR 2 lakh per transaction -
Reporting Timeline and Mode
Particulars Requirement Form Form 61A Due Date 31st May following the financial year Filing Mode Electronic filing via the income tax portal Authentication Digital Signature or EVC Penalties for Non‑Compliance
Nature of Default Penalty Failure to file SFT INR 500 per day (INR 1,000 per day after notice) Furnishing inaccurate information INR 50,000 Continued default after notice Enhanced daily penalty Penalties apply per reporting entity, not per transaction. The Statement of Financial Transactions is a cornerstone of India’s technology-driven, transparent, and risk-based tax administration system. It reinforces voluntary compliance, enhances the accuracy of taxpayer profiles, and enables the tax department to move away from intrusive assessments towards targeted, data-backed enforcement. SFT converts financial behavior into compliance intelligence.
