CBDT’s Revised Procedure for Registration/ Online Submission of ‘Statement of Financial Transactions (SFT)’ in Form 61A under IT section 285BA (read with IT Rule 114E)
CBDT has notified the Revised Procedure for Registration and online Submission of ‘Statement of Financial Transactions (SFT)’ for FY 2017-18 in Form 61A under IT section 285BA read with IT Rule 114E, latest by 31st May 2018.
The procedure/ instruction is updated in light of the newly launched “Reporting Portal” (https://report.insight.gov.in), where the SFT submission can be made online. However, the case of Post Offices/ Sub-registrars the SFT can be submitted with TIN-NSDL facilitation Centers.
It may be noted that delayed filing of SFT will attract a penalty of Rs. 1,000 per day and inaccurate submission of SFT may also attract penalty.
1. Section 285BA of the Income Tax Act, 1961 (hereunder referred to as the “Act”) requires specified reporting persons to furnish statement of financial transaction. Rule 114E of the Income Tax Rules, 1962 (hereunder referred to as the “Rules”) specifies that the statement of financial transaction required to be furnished under sub-section (1) of section 285BA of the Act shall be furnished in Form No. 61A. The nature and value of transaction to be furnished by the reporting person under Rule 114 E is enclosed as Annexure A.
2. As per sub rule (6)(a) of Rule 114E, every reporting person/ entity shall communicate to the Principal Director General of Income-tax (Systems) the name, designation, address and telephone number of the Designated Director and the Principal Officer and obtain a registration number. The procedure for registration for statement of financial transactions (SFT) was specified in Notification No. 13 dated 30th December, 2016. The functionality for submission of statement of financial transactions had been enabled on efiling portal vide Notification No.1 of 2017 dated 17th January 2017 and the earlier instruction is being updated in the light of newly launched “Reporting Portal” (https://report.insight.gov.in).
3. As per sub rule (4)(a) of Rule 114E, the statement of financial transactions shall be furnished through online transmission of electronic data to a server designated for this purpose under the digital signature of the person specified in sub-rule (7) and in accordance with the data structure specified in this regard by the Principal Director General of Income tax (Systems). The Post Master General or a Registrar or Sub-registrar or an Inspector General have the option to furnish the statement in a computer readable media, being a Compact Disc or Digital Video Disc (DVD), alongwith verification in Form-V on paper. The statement of financial transactions shall be furnished on or before the 31st May, immediately following the financial year in which the transaction is registered or recorded.
4. As per sub-rule (4)(b) of Rule 114E Principal Director General of Income-tax (Systems) shall specify the procedures, data structures and standards for ensuring secure capture and transmission of data, evolving and implementing appropriate security, archival and retrieval policies.
5. The values under Statement Type & Person Type and field number in Part B of Form No. 61A have been modified / enhanced in exercise of the power delegated under sub-rule (4)(b) of Rule 114E by the Principal Director general of Income-tax (Systems). The detailed list of modification / changes in schema / data structure of the Form No.61A is attached as Annexure D.
6. In exercise of the powers delegated by Central Board of Direct Taxes (‘Board’) under sub rule (4)(a) and (4)(b) of Rule 114E of the Income tax Rules 1962, the Principal Director General of Income-tax (Systems) hereby lays down the following procedures:
a) Already registered reporting persons/entities on e-filing portal: The registration details of already registered reporting persons/entities have been migrated from e-filing portal to reporting portal. The registered users of such reporting persona/ entities shall be communicated of their new login credentials through registered email to be used at Reporting Portal. There is no need of registering again for such persons/ entities.
b) New Registration, Generation of Income Tax Department Reporting Entity Identification Number (ITDREIN) and Principal Officer: The reporting person/entity is required to get registered with the Income Tax Department by logging in to the e-filing website https://incometaxindiaefiling.gov.in/) with the log in ID used for the purpose of filing the Income Tax Return of the reporting person/entity. The reporting person/entity needs to click on “Reporting Portal” link under “My Account” tab at e-filing portal to access ‘Reporting Portal’ for first time registration. The reporting person/entity will be required to enter the details of form type, category and address of reporting person/entity along with details of Principal Officer mandatorily. On successful submission, the ITDREIN is generated and the principal officer will receive a confirmation e-mail on his/her registered e-mail address and SMS at his/her registered mobile number. There will be no option to de-activate ITDREIN, once it is generated.
c) Addition of Designated Director: The reporting person/entity is required to submit the details of designated director either at the time of new registration or at later stage, but before any statement is submitted on reporting portal. The designated director will receive a confirmation e-mail with login credentials for login into reporting portal (https://report.insight.gov.in) at his/her registered email address. Only, the designated director of the reporting person/entity can digitally sign and upload the Statement of Financial Transaction (SFT) and the corresponding correction statements, if any through his/her own login credentials at the reporting portal or through Generic submission Utility.
d) Submission of Form No. 61A: Every reporting person/entity is required to submit the Statement of Financial Transaction (SFT) in Form No. 61A. The prescribed schema, Report Generation and Validation Utility for Form No. 61A and Generic Submission Utility can be downloaded from the reporting portal under “Resources” tab. General and transaction specific guidelines for preparation of SFT in the specified format is enclosed as Annexure B and Annexure C respectively. The prepared SFTs to be filed is required to be digitally signed by and uploaded at the reporting portal or through Generic Submission Utility through the login credentials (PAN and password) of the designated director.
e) Submission of correction statement: In case, the reporting person/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/entity through Data Quality Report (DQR) after submission of Statement, it is required to remove the defects by submitting a correction statement. The number of “Reports Requiring Correction (RRC)” will be visible against the original statement on reporting portal under the ‘Statement Pending for Correction’ tab. The user can download the DQR file from the DQR column under ‘Statements Pending for Correction’ Tab at Reporting Portal, which can then be opened on the Report Generation utility to find and fix the errors. The reporting person/entity needs to rectify all the defects till the number of “Reports Requiring Correction (RRC) becomes zero within specified time.
f) Deletion of Submitted Reports in a statement: In case, the reporting person/entity wishes to delete the inadvertently filed reports within a statement, it can choose the statement type as “Deletion Statement” and file all such reports within a single statement to be deleted with exact previously filed values against each field. The manner of filing Deletion Statement shall be similar to submission of correction statement.
g) Security, archival and retrieval policies: The reporting person/entity is required to document and implement appropriate information security policies and procedures with clearly defined roles and responsibilities to ensure security of submitted information and related information/documents. The reporting person/entity is also required to document and implement appropriate archival and retrieval policies and procedures with clearly defined roles and responsibilities to ensure that submitted information and related information/documents are available promptly to the competent authorities (contd… please refer the above attachment).
CBDT Guidelines/ Manual on Procedure for Registration, Preparation & Submission of Statement of Financial Transactions (SFT) as per IT section 285BA read with Rule 114E along with Nature and value of transactions to be reported
CBDT has prescribed Guidelines on the Procedure for registration, preparation and submission of Statement of Financial Transactions (SFT), including nature and value of transactions to be reported in Form 61A as per IT Section 285BA read with IT Rule 114E, latest by 31 May 2017, as under:
CBDT (DIT Systems) Notification No. 1/2017 (Income Tax) dt. 17 Jan. 2017
CBDT Clarification on Requirements of Reporting Cash Transactions under IT Rule 114E; No aggregation required
CBDT has clarified that reporting requirements under Rule 114E relating to submission of Statement of Financial Transactions (SFT) are applicable when a single transaction involves receipt of cash payment exceeding Rs. 2 lac for sale of goods or services, i.e. no aggregation is required. The norms of aggregation contained in sub-rule 3 of Rule 114E have been amended vide CBDT’s Notification No. 91/2016 dated 6th October, 2016 clearly indicating that the said transactions did not require aggregation.
CBDT Press Release dt. 22 Dec. 2016
Rule 114E of Income-tax Rules, 1962, for furnishing statement of financial transactions (SFT) came into force with effect from 1st April, 2016. Any person who is liable for audit under section 44AB of the Income-tax Act, 1961 is required to furnish a statement in respect of transaction at serial no. 11 of Rule 114E(2) relating to receipt of cash payment exceeding Rupees two lakh for sale of goods or service. Doubts were raised if such transactions are required to be aggregated for reporting.
The norms of aggregation contained in sub-rule 3 of Rule 114E have been amended vide CBDT’s Notification No. 91/2016 dated 6th October, 2016 clearly indicating that the said transactions did not require aggregation and the reporting requirement under SFT for this purpose is on receipt of cash payment exceeding Rupees two lakh for sale of goods or services per transaction.