Sandeep Ahuja & Co.

Established in the year 1986, we are a leading chartered accountancy firm based in Delhi & NCR rendering comprehensive professional services which include statutory audit, internal audit, direct tax, transfer pricing, GST, bank audit, propriety audit, cost accounting, internal financial controls and risk advisory.

Friday, May 19, 2017

Last date for Filing of "Statement of Financial Transactions' under Section 258BA read with Rule114E in Form 61A is 31.05.17

INTRODUCTION: To keep a vigil on high value transactions undertaken by the taxpayer, a new concept of "Statement of Financial Transactions" under section 258BA of Income Tax Act, 1961 has been introduced.  Further, Rule 114E of Income Tax Rules 1962, specifies furnishing of “Statement of financial Transactions” in Form No 61A.
With the help of the statement Income Tax authorities will collect information on certain prescribed high value transactions undertaken by a person during a particular financial year.

BASIC PROVISIONS OF SECTION 258BA OF INCOME TAX ACT, 1961
Statement of ‘high value financial transactions‘ is required to be furnished under section 285BA of
the Income-tax Act, 1961 by ‘specified persons‘ in respect of ‘specified transactions‘ registered or recorded by them during the financial year.

The ‘specified persons’ and the ‘specified transactions’ are listed in new Rule 114E of the Income-tax Rules, 1962.

PERSONS & NATURE OF TRANSACTIONS COVERED REQUIRED TO FILE "STATEMENT OF FINANCIAL TRANSACTIONS"

S. No.
Description & Value of Transaction
Reporting Person
Transactions to be  Reported
1
Payment of cash aggregating Rs. 10,00,000 or more in a year for purchase of DD, Pay Orders, Bankers Cheque.
• A Banking Company,
• Cooperative Bank
SFT-001
2
Payment made in cash aggregating to Rs. 10,00,000 or more in a year for purchase of pre-paid instruments issued by RBI
• A Banking Company,
• Cooperative Bank
SFT-002
3
A Cash deposit aggregating to Rs. 50,00,000 or more in a year in one or more current account of a person
• A Banking Company,
• Cooperative Bank
SFT-003
4
A Cash withdrawal aggregating to Rs. 50,00,000 or more in a year from one or more current account of a person
• A Banking Company,
• Cooperative Bank
5
A cash deposit aggregating to Rs. 10,00,000 or more in a year in one or more bank accounts (other than current account or time deposit)
• A Banking Company,
• Cooperative Bank,
• Post Master General
SFT-004
6
One or more time deposit (other than renewal) aggregating to Rs. 10,00,000 or more of a person
• A Banking Company,
• Cooperative Bank,
• Post Master General
• Nidhi (Sec 406 of the
Companies Act 2013)
SFT-005
7
Credit card payment made by any person aggregating to Rs. 1,00,000 or more in a year in cash or Rs. 10,00,000 or more by any other mode
• A Banking Company,
• Cooperative Bank,
• Any Institution issuing Credit Card
SFT-006
8
Receipt from any person of an amount agregating to Rs.10,00,000 or more for acquiring bonds or debentures issued.
Receipt from a person of an amount aggregating to Rs.10,00,000 or more for acquiring bonds or debentures issued.
SFT-007
9
Receipt from any person of an amount aggregating to Rs. 10,00,000 or more in a year for acquiring shares issued by the company (including share application money)

 Company issuing shares
SFT-008
10
Buy back of shares from any person (other than the shares bought in the open market) for an amount or value aggregating to Rs. 10,00,000 or more in a year.

 A company listed on a
Recognized stock exchange
SFT-009
11
Receipt of an amount aggregating Rs. 10,00,000 or more for acquiring units of one or more schemes of a Mutual Fund. (other than switching of funds from one scheme to
another)

Trustee of a Mutual Fund
SFT-010
12
Receipt from any person for sale of foreign currency or expense in such currency through a debit or credit card or through issue of travellers cheque or draft or any other instrument of an amount aggregating to Rs. 10,00,000 or more in a year
•Authorized Dealer,
•Money
•Changer,
•Off-shore Banking Unit  as covered  in
FEMA, 1999
SFT-011
13
Purchase or sale by any person of immovable property for an amount of Rs. 30,00,000 or more or valued by the stamp valuation authority referred to in section 50C of the Act at Rs. 30,00,000 or more.
Inspector-General or Sub- Registrar appointed under Registration Act, 1908
SFT-012
14
Receipt of cash payment exceeding Rs. 2,00,000 for sale of goods or providing services of any nature other than those
specified above
Any person who is liable for audit under section 44AB of the Act
SFT-013

AGGREGATION RULES APPLICABLE W.R.T "STATEMENT OF FINANCIAL TRANSACTIONS".

Aggregation Rules are applicable for all transactions except SFT- 012 "Purchase or sale of immovable property" (SFT-012)  &  "Cash payment for goods and services"  (SFT- 013).
Aggregation rules needs to be to identify transactions/persons/accounts which are reportable.  Rule 114E specifies that the reporting person shall, while aggregating the amounts for determining the threshold amount for reporting in respect of any person :

a.    take into account all the accounts of the same nature maintained in respect of that person during the financial year;
b.    aggregate all the transactions of the same nature recorded in respect of that person during the financial year.
c.    attribute the entire value of the transaction or the aggregated value of all the transactions  to all the persons, in a case where the account is maintained or transaction is recorded in the name of more than one person.

MAJOR COMPLIANCE REQUIREMENT:  Statement of Financial Transactions will have to be filed by all those persons who are subject to Tax audit under Section 44AB of Income Tax Act. This statements has to be filed by such specified persons even though there are no or NIL receipts of cash payments exceeding INR 2,00,000 as stated in Point no. of above table.

MATTER OF CONCERN :

-          The person (all corporate or Non – corporate)  who is liable for Audit under Section 44AB of the Act has to File Statement even if it is NIL.
-          The person not liable to tax audit should also know that if they have made any transaction with any of such other reporting entity that should be reflected in personal Income Tax Return.

DUE DATE OF FILING STATEMENT OF FINANCIAL TRANSACTIONS IN FORM 61A: The statement of financial transactions (online return in Form No. 61A with digital signature) shall be furnished on or before the 31st May, immediately following the financial year in which the transaction is registered or recorded.

PENALTIES U/S 271FA & OTHER CONSEQUENCES FOR NON FILING OF STATEMENT OF FINANCIAL TRANSACTIONS IN FORM 61A.
(a) Penalty u/s 271FA: Penalty under section 271FA shall be attracted @ of Rs. 100 per day of default.

(b) Issue of Notices to Defaulting Persons u/s 285BA(5): Tax authorities can issue a notice to the person directing him to file the statement within a period not exceeding 30 days from the date of service of such notice.

 (c) Penalty @ INR 500 per day: If defaulting person  commits further default after receipt of further notice then a penalty of Rs. 500 per day will be levied from the day immediately following the day on
which the time specified in such notice for furnishing the statement expires.

PENALTY FOR FURNISHING INCORRECT INFORMATION IN FORM 61A:
As per section 271FAA, a penalty of INR 50,000 shall be levied if  the person concerned furnishes incorrect information in form 61A provided:
a.       the inaccuracy is due to non due diligence on part of such person.
b.      The person knows inaccuracy at the time of furnishing such information.
*Rule w.r.t to Section 271FAA are yet to be notified.

OUTLINE OF STEPS  FOR SUCCESSFUL FILING OF FORM 61A

Step 1:  Generate ITDREIN- ITDREIN is mandatory for filing Form 61A.

ITDREIN is the Unique ID issued by Income Tax Department (ITD) which will be communicated by ITD after the registration of the reporting entity with ITD. The ITDREIN is a 16-character identification number in the format XXXXXXXXXX.YZNNN.

Step 2: After ITDREIN has been generated users can upload form 61A successfully.
For filling up Form 61A, users can download JAVA Utility from department's website, fill up the data & upload on the portal.

DATE & INFORMATION REQUIRED IN FORM 61A IN CASE OF CASH RECEIPTS MORE THAN INR 2,00,000.

(I) Part A of Form 61A
a.       Reporting entity Name
b.      IDREIN no.
c.       Registration no. of such entity
d.      Name of Principle officer
e.      Designation of Principle Officer
f.        Phone, E-mail ID & Address of principle officer.

(II) Part B of Form 61A
a.       Name, Father's name & type of person form whom payment have been received.
b.      PAN & Aadhaar no. of person from whom payment has been received.
c.       Aggregate gross amount received from such person.
d.      Aggregate gross amount of cash received from such person.

e.      Aggregate gross amount paid to such person.

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