In past few months we have started seeing various SFT transactions in our Form 26AS.
Form 26AS which was earlier just a tax credit statement, was later converted into Annual information statement and it is then that we came to see more of such SFT transaction being linked in our Form 26AS.
SFT basically means specified financial transaction mentioned under rule 114E of the Income Tax act wherein few specific transactions have been listed which needs to be reported by specified entities/ authorities which is as under:
| SFT number | Particulars | Amount (in aggregation of) | Person liable to report |
| SFT- 001: | Purchase of bank drafts or pay orders in cash | Rs. 10 lakh | Banking company, co-operative bank |
| SFT- 002: | Purchase of pre-paid instruments in cash | Rs. 10 lakh | Banking company, co-operative bank |
| SFT- 003: | Cash deposit in current account | Rs. 50 lakh | Banking company, co-operative bank |
| SFT- 004: | Cash deposit in account other than current account | Rs. 10 lakh | Banking company, co-operative bank or post master office |
| SFT- 005: | Time deposit | Rs. 10 lakh | Banking company, co-operative bank or post master office or Nidhi or NBFC |
| SFT- 006: | Payment for credit card | Rs. 1 lakh in cash or Rs. 10 lakh in any other mode | Banking company, co-operative bank or post master office |
| SFT- 007: | Purchase of bonds or debentures | Rs. 10 lakh | Company or institution issuing debentures or bonds |
| SFT- 008: | Purchase of shares | Rs. 10 lakh | Company issuing shares |
| SFT- 009: | Buy back of shares | Rs. 10 lakh | Company listed in recognized stock exchange |
| SFT- 010: | Purchase of mutual fund units | Rs. 10 lakh | · A trustee of mutual fund or any authorized person |
| SFT- 011: | Purchase of foreign currency | Rs. 10 lakh | Authorised person under FEMA act |
| SFT- 012: | Purchase or sale of immovable property | Rs. 30 lakh (individual transaction) | Inspector general or registrar or sub registrar |
| SFT- 013: | Cash payment for goods and services | Rs. 2 lakh (individual transaction) | Any person liable to audit u/s 44AB |
| SFT- 014: | Cash deposits during specified period (9th Nov to 30th Dec, 2016) | Rs. 2.5 lakh | Banking company, co-operative bank or post master office |
Thus, from the above table it is clear that who needs to report such transaction and file SFT return it will the person with whom transaction has been done and not the person who has done transaction.
Thus, normal individuals purchasing shares, mutual funds or depositing amount in FD don’t have to file any SFT return.
Brief details of SFT return is as follows:
Form 61A has four parts. Part A contains statement level information is common to all transaction types. The other three parts relate to report level information which has to be reported in one of the following parts (depending on the transaction type):
- Part B (Person Based Reporting)
- Part C (Account Based Reporting)
- Part D (Immovable Property Transaction Reporting)
Few other transactions were also added to the list of SFT transaction by our Hon’ble PM on announcing the transparent taxation structure which can be read HERE: https://www.taxontips.com/hotel-bill-above-20000-purchase-of-jewellery-white-goods-above-rs-1-lakh-will-be-reported-sft-scope-increased/ but same has not been incorporated in Income Tax act as yet.
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