Updated for Assessment Year 2025–26
“Compliance is the mirror of an entity’s integrity; Form 61A is one such reflection.”
1. Statutory Basis – Section 285BA of the Income-tax Act, 1961
Section 285BA was introduced by the Finance Act, 2003 and provides for obligation of specified persons to furnish a statement of financial transaction or reportable account to the income-tax authority or other prescribed authority in respect of specified financial transactions registered or recorded by them during the financial year.
This statement is filed using Form No. 61A, as prescribed under Rule 114E of the Income-tax Rules, 1962.
The primary objective is to capture high-value transactions that are likely to have a tax implication and facilitate risk-based profiling and compliance verification through tools like the Annual Information Statement (AIS) and Taxpayer Information Summary (TIS).
2. Interpretation of Section 285BA & Rule 114E
Key Provisions:
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Section 285BA(1) mandates that a person responsible for registering or maintaining books containing a specified financial transaction must furnish a statement in respect of such transactions in a prescribed form and manner.
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Section 285BA(3) empowers the authority to notify new types of reportable transactions.
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Section 285BA(5) provides for issue of notice where no return is filed or incorrect information is furnished, requiring filing within 30 days.
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Rule 114E prescribes the nature of transactions, thresholds, and the reporting form (Form 61A).
3. Persons Required to Furnish Form 61A
As per Rule 114E(1), the following categories of persons are required to furnish Form 61A if the threshold conditions are met:
| Category | Reporting Entities |
|---|---|
| Financial Institutions | Scheduled Banks, Co-operative Banks, NBFCs |
| Government Bodies | Post Master General, Registrar/Sub-Registrar under the Registration Act, 1908 |
| Corporates | Companies issuing shares, bonds, debentures, or buyback |
| Mutual Fund Houses | Trustee/Manager of a Mutual Fund under SEBI (MF) Regulations |
| Forex & Travel Agents | Authorized Dealer under FEMA |
| Business Entities | Persons liable for tax audit u/s 44AB of the Income-tax Act |
4. Reportable Transactions under Rule 114E – Thresholds for FY 2024–25
| S. No. | Nature of Transaction | Threshold (Aggregate in FY) | Reporting Person |
|---|---|---|---|
| 1 | Cash deposit in current account | ≥ ₹50,00,000 | Bank / Co-op Bank |
| 2 | Cash deposit in SB/post office account | ≥ ₹10,00,000 | Bank / Co-op Bank / Post Master |
| 3 | Cash withdrawal from current account | ≥ ₹50,00,000 | Bank / Co-op Bank |
| 4 | Cash payments for DDs/POs/banker’s cheque | ≥ ₹10,00,000 | Bank / Co-op Bank |
| 5 | Time deposits (all accounts except renewals) | ≥ ₹10,00,000 | Bank / NBFC / Post Office / Nidhi |
| 6 | Credit card payments: Cash / Non-cash | ≥ ₹1,00,000 / ₹10,00,000 | Issuer of Credit Card |
| 7 | Purchase of bonds/debentures | ≥ ₹10,00,000 | Issuer Company |
| 8 | Purchase of shares | ≥ ₹10,00,000 | Issuer Company |
| 9 | Buyback of shares | ≥ ₹10,00,000 | Listed Company |
| 10 | Purchase of mutual fund units | ≥ ₹10,00,000 | Mutual Fund House |
| 11 | Purchase/sale of foreign currency | ≥ ₹10,00,000 | Authorized Dealer |
| 12 | Sale or purchase of immovable property | ≥ ₹30,00,000 (or Stamp Value) | Sub-Registrar |
| 13 | Receipt of cash for goods/services | > ₹2,00,000 | Any person liable to tax audit u/s 44AB |
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The term "aggregate" implies that reporting is not limited to a single transaction but is cumulative across the financial year.
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PAN and Aadhaar are compulsory identifiers for most SFT entries, failing which reporting is invalid.
5. Timeline for Furnishing Form 61A (AY 2025–26)
| Compliance Year | Reporting Period | Due Date |
|---|---|---|
| AY 2025–26 | 1st April 2024 – 31st March 2025 | 31st May 2025 |
6. Filing Procedure – Reporting Portal
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Registration: Register as a reporting entity at https://report.insight.gov.in with valid PAN, DSC, and principal contact details.
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Preparation:
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Download Report Generation Utility (RGU) and Generic Submission Utility (GSU).
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Validate data as per the prescribed schema and prepare the XML file.
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Digital Signature: Sign and encrypt the file using GSU and DSC.
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Upload and Acknowledgment: Upload XML, and upon validation, receive acknowledgment number on the portal and registered email.
Best Practice: Keep the Acknowledgment and XML securely archived for 6 years for audit and litigation readiness.
7. Penalties for Non-Compliance
| Default | Relevant Section | Penalty |
|---|---|---|
| Non-filing by due date | Section 271FA | ₹500 per day |
| Continued default after notice | Section 285BA(5) | ₹1,000 per day |
| Furnishing inaccurate/incomplete information | Section 271FAA | ₹50,000 |
In M/s XYZ Pvt. Ltd. v. ITO, non-filing of SFT due to technical errors was still penalized. The court held that ignorance of procedural compliance is not a valid excuse when thresholds are met.
8. Voluntary Nil Reporting – A Strategic Practice
Though not statutorily mandated, furnishing a Nil SFT:
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Demonstrates transparency
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Prevents future notices
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Establishes internal control practices
Recommended for corporates, NBFCs, and mutual fund houses who anticipate transactions below threshold.
9. Contents & Structure of Form 61A
| Part | Description |
|---|---|
| Part A | Entity-level details (PAN, category, address, responsible person) |
| Part B | Person-based reporting (e.g. mutual funds, bonds, shares) |
| Part C | Account-based reporting (e.g. bank accounts, time deposits) |
| Part D | Transaction-based reporting (e.g. property sale/purchase, cash for goods/services) |
10. Strategic Tips for Compliance Teams
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Implement SOPs for monthly tracking of transactions crossing thresholds.
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Use PAN/Aadhaar validation APIs to avoid rejections.
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Ensure inter-departmental coordination (Finance, Legal, Compliance).
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Review previous year SFT and reconcile with AIS/TIS to eliminate mismatches.
11. Budget 2024–25 Update (AY 2025–26)
As of April 2025, no amendments have been made to Section 285BA or Rule 114E. The thresholds and transaction categories remain unchanged. However, the ITD has strengthened data integration across PAN, GST, TDS, and SFT systems.
Expect stricter matching algorithms under AIS and TIS for FY 2024–25.
12. Conclusion – The Legal and Ethical Imperative
Form 61A compliance is not merely a statutory formality—it is the cornerstone of financial transparency, tax accountability, and reputational integrity. In an age where digital data drives assessments, omissions or inaccuracies can lead to litigation, audits, or reputational risks.
“Report not only to comply, but to control the narrative of your tax profile.”
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