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What is Specified Financial Transaction (Form 61A)
The Income Tax Act has framed a new concept to furnish a Statement of Financial Transactions or reportable account, previously also known as Annual Information Return (AIR).
Section 285BA of the Income-Tax Act demands to furnish this statement. Rule 114E of the Income Tax Rules specifies that this statement must be furnished via Form No. 61A.
Which are the Specified Financial Transactions?
The specified financial transactions are:
Due Date to File Form 61A
Statement of Financial Transactions needs to be furnished within 31st May of next year for every previous financial year where the transaction occurs.
A penalty under Section 271FA of Rs 500 per day shall be levied for the initial failure to file within the due date. The authorities would issue a notice to such an assessee, demanding the assessee to submit the form within 30 days from the issuance of such notice. In case such assessee continues to be the assessee in default by not answering to such notice, a penalty would be levied on the assessee that would amount to Rs 1000 per day of such default. This penalty would be calculated from the expiry of the period as stipulated in such notice.
Filing Nil Statement
There’s a dilemma many have that if an entity that hasn’t entered into any of Specified financial transactions in the financial year but falls into the reporting class of person as provided under the provisions of the Income Tax Act – Do they need to file a NIL Form 61A/Statement of financial transactions.
There have been few circulars issued by the CDBT (Central Board of Direct Taxation) on the same which somewhat hasn’t solved the dilemma, however, experts in the field recommend that Nil Statement is not mandatory but to stay on the safer side an assessee could consider filing the STF (Statement of Financial Transactions) or Form 61A.
Filing of Statement of Financial Transactions (SFT) Online
Various Parts of Form 61A
Form 61A has different parts
-Part A Contains statement-level information that is common for all transaction types. -The report level information has to be reported in one of the following parts depending on the transaction type
– Part B Reporting of aggregated financial transactions by the person
– Part C Reporting of bank accounts
– Part D Reporting of immovable property transactions
Find your Form 61A here: Form 61A