By CA Surekha Ahuja
Statutory Due Date for FY 2025-26: 31 May 2026
Legal Backbone – Where SFT / Form 61A Fits
- Section 285BA of the Income-tax Act requires specified persons to furnish an annual Statement of Financial Transactions (SFT) or reportable accounts.
-
Rule 114E prescribes:
- reporting persons,
- reportable transactions and thresholds, and
- filing mechanism through Form 61A.
- Form 61A is filed electronically in XML format on the income-tax reporting portal as per the prescribed schema and validation rules.
For share issues, Rule 114E requires reporting where a company:
“Receives from any person an amount aggregating to ₹10 lakh or more in a financial year for acquiring its shares, including share application money.”
This provision brings:
- start-ups,
- closely-held companies,
- family-managed businesses, and
- promoter-driven funding structures
within the SFT reporting framework.
Snapshot Table – Share-Issue SFT for FY 2025-26
| Head | What it means | Law / Rule | Transactions covered | What you must actually do |
|---|---|---|---|---|
| Concept | SFT / Form 61A is an annual electronic return of specified high-value transactions filed in XML. | Sec. 285BA, Rule 114E, Form 61A. | Share issues, high-value cash receipts, deposits, property, securities, etc. | Identify whether you qualify as a “company issuing shares” and/or “44AB assessee” under Rule 114E. |
| Purpose | Provide a PAN-wise transaction trail feeding AIS/TIS and risk analytics. | SFT + AIS/TIS framework. | Investor flows, cash sales, property and market transactions. | Focus on accurate reporting and reconciliation. |
| Due date FY 2025-26 | SFT for FY 2025-26 (01.04.2025 to 31.03.2026) must be filed by 31.05.2026. | Sec. 285BA(2) read with Rule 114E. | All SFT codes, including share-issue SFT. | Treat 31 May as a hard cut-off. |
| Who is in scope (non-banks) | Companies issuing shares and certain 44AB assessees may also be covered. | Rule 114E reporting table. | Start-ups, private/closely-held companies, family businesses, professionals under 44AB. | Independently evaluate SFT applicability. |
| Share-issue SFT trigger | Reporting applies where receipts from one person towards acquisition of shares aggregate to ₹10 lakh or more during the FY. | Rule 114E share-issue entry. | Promoter funding, family rounds, angel/fund investments, ESOP trusts, group entities. | Compute investor-wise annual aggregates. |
| What is aggregated | Share capital + securities premium + share application money. | Rule 114E framework. | Credits to capital, premium and application money accounts. | Entire consideration is relevant for threshold testing. |
| Aggregation logic | Threshold applies per person, per financial year. | Rule 114E + Form 61A schema. | Multiple tranches, staggered rounds, repeated infusions. | Apply PAN-wise annual aggregation. |
| Data required | PAN, KYC, annual aggregate and transaction-wise details. | Form 61A Part B + XML schema. | Investors crossing ₹10 lakh threshold. | Maintain proper investor-wise documentation. |
| Penalty – late/non-filing | Daily penalty for delay/non-furnishing. | Sec. 271FA. | Reporting defaults. | Timely annual closure is critical. |
| Penalty – inaccurate filing | Penalty for inaccurate reporting not corrected. | Sec. 271FAA. | Wrong PANs, amounts or omitted investors. | Maintain review and correction controls. |
Share-Issue SFT Test for FY 2025-26
Step 1 – Identify All Share-Subscription Persons
Identify every person who, during FY 2025-26, has paid money towards acquisition of shares, including:
- promoters, founders and directors,
- relatives and group entities,
- investment vehicles and ESOP trusts,
- angel investors, funds and AIFs,
- resident and non-resident subscribers.
Exclude:
- pure loans/ICDs without genuine share linkage, and
- business/trade receipts incorrectly parked as share money.
Step 2 – Compute Investor-Wise Aggregation
Aggregate all amounts forming part of share subscription during FY 2025-26, including:
- share capital,
- securities premium, and
- share application money, even if allotment occurs later.
Important points:
- share application money is generally tested in the year of receipt itself,
- refunded application money should be handled consistently with proper documentation.
The threshold is tested:
- investor-wise,
- PAN-wise, and
- on aggregate annual receipts.
Step 3 – Apply the ₹10 Lakh Threshold
| Investor | Aggregate Receipts During FY 2025-26 | Reporting Position |
|---|---|---|
| Promoter A | ₹12 lakh | Reportable |
| Investor B | ₹8 lakh | Not Reportable |
Where aggregate annual receipts from a person are:
- below ₹10 lakh → no reporting,
- ₹10 lakh or more → mandatory reporting in Form 61A.
Form 61A – Core Reporting Requirements
Part A – Entity Details
Capture:
- reporting entity details,
- reporting period,
- statement type (Original / Correction / Nil),
- principal officer details.
Key check:
- correction statements must correctly quote the original statement reference.
Part B – Investor-Level Reporting
For each reportable investor, Form 61A generally captures:
- PAN and investor details,
- investor status,
- aggregate amount,
- receipt-wise transaction details,
- bank account reference,
- security description/ISIN wherever applicable.
Senior-level review should ensure:
- reconciliation with books and bank statements,
- consistency with PAS-3 / allotment records,
- correct threshold testing and PAN capture.
Filing Mechanics – Practical Process
- Activate reporting profile and DSC under Section 285BA.
- Download latest Form 61A schema/XSD and reporting utility.
- Prepare investor-wise reporting sheet with PAN, aggregate amount and transaction details.
- Populate Part A and Part B in the utility.
- Validate data and generate XML.
- Upload XML through Form 61A/SFT interface and submit using DSC.
- Retain acknowledgement / Transaction ID and ensure status reflects “Accepted”.
- Wherever defects arise, file correction statement quoting original statement reference.
Briefly – Cash-Receipt SFT for 44AB Assessees
Apart from share-issue reporting, certain persons liable to audit u/s 44AB may also be required to furnish SFT for specified cash receipts.
Broadly, reporting may apply where:
- cash consideration is received for sale of goods/services or professional receipts, and
- prescribed thresholds are crossed.
Only physical cash receipts are covered. Cheque, RTGS, NEFT, UPI and card receipts fall outside this specific reporting category.
Penalties & Risk – Beyond Bare Sections
- Section 271FA: Per-day penalty for delay/non-furnishing of SFT.
- Section 271FAA: Penalty for inaccurate reporting not corrected despite knowledge.
- Tax audit interaction: Form 3CD now specifically captures SFT-related disclosures.
- AIS/TIS integration: SFT data is independently matched with banking, registrar and other third-party information.
Accordingly, SFT on share issues is no longer merely a procedural filing. It now forms part of the wider capital-tracking and reporting framework within the tax ecosystem.
