Tuesday, May 29, 2018

Form 61A: Specified Financial Transactions due date 31st may,2018 & its Applicability, Penalty and Procedure

Applicability of Form 61A: Only those persons who have registered or recorded the transactions as specified in Rule 114E (2) read with Section 285BA (1) are required to file Form 61A.
No Requirement to file Nil Form 61A if there are no reportable transactions.
As per Rule 114E of Income Tax Rules, following persons are required to file Form 61A :
S. No.
Reporting Person
Transactions to be Reported
Any person liable to audit u/s 44AB
Receipt of cash payment exceeding Rs. 2 lakhs for sale by any person of goods or services of any nature
A banking company including a Cooperative Bank
a. Payment in cash to a Bank for Bank Drafts/ Pay Orders/ Bankers Cheque aggregating to Rs. 10 Lakhs for more ion a Financial Year.

b. Payment in cash for purchase of prepaid instruments issued by RBI aggregating to Rs. 10 Lakhs for more in a Financial Year.

c. Cash deposits/ withdrawals (including a bearer cheque) aggregating to Rs. 50 Lakhs or more in a FY in one or more current accounts of a person.
Post Master General or
Banking Company or a
Cooperative Bank

Cash deposits/ withdrawals (including bearer cheque) aggregating to Rs. 10 Lakh or more in the account of a person in a Financial Year (Other than current Account)
Post Master General
Banking Company
Co Operative Bank
Nidhi Bank
Non Banking Finance Company

Payment in any mode (Other than through renewal) for one or more Time Deposits aggregating to Rs. 10 Lakhs more  of a person during a financial year.

Banking company;
Co-operative bank or a 
Company/institution issuing credit card
Payment made by any person of an amount aggregating to:
·         1 lakh or more in cash
·         10 lakhs or more by any mode against bill raised in respect of one or more credit cards issued to that person in an FY
A company issuing bonds and debentures
Receipt of Rs. 10 lakhs /or more from a person aggregating to 10 lakhs in a FY for acquiring bonds/debentures.
A company issuing shares
Receipt of Rs. 10 lakhs or more in aggregate in a FY for acquiring shares
Buy Back of securities by a co. listed on recognized stock exchange
Buy back of shares from a person for an amount aggregating to Rs. 10 lakhs or more in a FY
Trustee/Manager of Mutual Fund
Receipt of Rs. 10 lakhs or more in aggregate in a FY for acquiring units of mutual fund (other than acquisition by way of transfer from one fund to another)
Dealers of Foreign Exchange
Receipt from any person for sale of foreign exchange including any Foreign exchange card or expenses through such debit/credit card or through travelers' cheque aggregating to Rs. 10 lakhs or more during a FY 
Inspector general /Registrar/Sub Registrar
Purchase/sale by a person of an immovable property for Rs. 30 lakhs or more or stamp duty value of which is ascertained at Rs. 30 lakhs or more u/s 50C
Banking Company
Co-operative bank
Post master general
Cash deposits during demonetization:-
·         1250000 or more in one or more current a/c of a person
·         250000 or more in one or more a/c other than current a/c of a person
Banking Company
Co-operative Bank
Post master General
Cash deposits during 1st April'16 to 9th Nov'16  in reportable accounts as determined under Point no. 12

 Penalties for Non Filing of Form 61A under section 271FA
1.      DEFAULT IN FILING FORM 61A u/s 285BA(1) : In case a person does not File Form 61A on or before the due date i.e. 31st May, 2018 then penalty @ Rs. 500 per day for the period of default.
2.      DEFAULT IN FILING FORM 61A SUBSEQUENT TO A NOTICE RECEIVED FROM DEPARTMENT U/S 285BA(5):  If after receipt of notice for non filing of  Form 61A, further default is made in filing 61A then after that, penalty @ 1000 per day shall be leviable for such further delay.
3.      Penalty of Rs. 50,000 u/s 271FAA for furnishing inaccurate particulars in Form 61A : A maximum penalty shall be levied if the person liable to file Form 61A furnishes inaccurate/untrue particulars and the original statement shall be treated as invalid.
            Whether NIL statement is required to file: Section 285BA deals with the obligation to furnish             statement of financial transaction or reportable account and Rule 114E deals with furnishing the             statement of financial transaction(SFT).
            Now the question is whether NIL statement is mandatory to file for an entity that has not entered     in any specified or reportable financial transaction in FY 17-18 but is covered under the category           of persons specified u/s 285BA read with rule 114E.
1.       Although Section 285BA read with rule 114E of Income Tax Rules, filing of NIL Form 61A is neither made mandatory explicitly nor this Section 281BA read with Rule 114E provides an express waiver from filing of NIL Form 61A in the absence of  reportable transactions.
2.       Although Nil Form 61A is not mandatory, but assessee may prefer to be on the safer side  of compliance by filing Nil Form 61A in the absence of reportable transactions. Further in order to maintain consistency in filings, assessee may prefer to file Nil Form 61A even in the absence of reportable transactions as the assessee had filed Form 61A for the last Financial Year.

3.      We however advise not to file NIL return for Form 61A as later on some transactions may be detected which were required to be reported in Form 61A but escaped notice of the assessee leading to Nil filing of Form 61A, then this may lead to a situation where hefty penalties may be levied based on inaccuracy of Form 61A filed earlier.
Procedure for Filing Form 61A
1.      CBDT has launched a separate portal for filing of Form 61A. Now every assessee has to file Form 61A  as required u/s 285BA read with Rule 114E on this separate "Reporting Portal".
2.      Principal Director General of Income-tax (Systems) hereby lays down the following procedures:
Already registered reporting person/entities on e-filing portal
New registration, Generation of Income Tax Department Reporting Entity Identification Number (ITDREIN)
1.       The registration details of already registered entity have been migrated to E-filing portal to Reporting Portal.
1. The reporting person is required to get registered with Income Tax Department by logging in to E-filing website with Log-in Id used for the purpose of filing of Income Tax return.
2. The registered user of such reporting person shall communicated his log-in credentials through registered E-mail to be used at reporting portal.
2. The reporting Person need to click
Reporting Portal under 'My Account" tab at E-filing portal to access Reporting Portal at first time registration.

3. The reporting person will be mandatorily required to fill details of form type, category and address of reporting person along with the details of Principal officer.

4.  On successful submission, ITDREIN is generated and Principal officer will receive a confirmation mail or SMS on  his registered mobile number.
Once ITDREIN is generated, it cannot be  deactivated.

Submission of form NO. 61
1. Every reporting Person is required to submit form no. 61.
2. Report Generation and Validation Utility for form 61 and Generic Submission Utility can be downloaded from the reporting Portal under "Resources Tab".
3. Using Report_Generation_Utility, It allow user to generate SFT(XML) with no financial transactions in it.
4. Fill required information in statement (Part A) and select ND (no data) from drop down field if no specified transaction in FY.
5. Save XML to desired location of the system.
6.  Prepared statement to be filed is required to be digitally signed by principal officer.
7. The prepared SFT 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.

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.
1.       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.

2.       The number of “Reports Requiring Correction (RRC)” will be visible against the original statement on reporting portal under the ‘Statement Pending for Correction’ tab.

3.       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.

Compiled by Tanveer Alam and Megha Bansal at Sandeep Ahuja & Co