Understanding SFT: Statement of Financial Transaction

What is SFT? A report of high-value financial transactions submitted to the Income Tax department to monitor significant financial activities. Legal Requirement: Under Section 285BA of the Income Tax Act, specific entities must report these transactions.

Types of Reportable Transactions: Purchases, sales, investments, loans, deposits, and services exceeding specific monetary thresholds. Who Must Report? Banks, financial institutions, government offices, registrars, vehicle authorities, stock exchanges, and others.

Filing Deadline: The SFT must be submitted by 31st May following the financial year of the transaction. Aggregation Rule: Combine similar transactions and accounts to determine if they exceed reporting thresholds.

Reporting Forms: Submit electronically using Form 61A with a digital signature. Penalties for Non-Compliance: Late or incorrect submissions can incur penalties, ranging from Rs. 500 to Rs. 1,000 per day.