Applicability of Form 61A and reporting in 3CD

To keep vigilance on high – value transactions entered by the taxpayers, The Income tax department has brought a new mechanism to furnish statement of financial transactions in the prescribed form 61A. Also known as Annual information return (AIR). It helps the department to curb the chances of tax evasion.

Form 61A is a statement of Specified Financial Transactions that need to be submitted by a notified taxpayer for the applicable financial year. Form 61A is generated under Sec 285 BA of Income Tax Act, 1961 read with Rule 114E of Income Tax Rules, 1962.

The primary purpose of Form 61A is to ensure transparency. Also, it helps taxpayers to maintain a record of all high-value transactions carried in a particular financial year.

Income-Tax Act requires specified reporting persons to furnish this statement. This statement must be furnished in Form No. 61A.   

Nature and value of transactions to be reported in Form 61A:

Sl.No	Nature and value of transaction	Class of person (reporting person)
1	Cash payment for the purchase of POs (Pay orders) / DDs (Demand drafts) for Rs. 10 Lakh or more	A banking company or a co-operative bank
	Cash payment exceeding Rs 10 lakh for purchasing RBI bonds, etc.
	Deposits or withdrawals amounting to Rs 50 lakh or more from any number of current accounts from a bank.
2	Cash deposits of ten lakh rupees or more in a financial year, in one or more accounts (other than a current account and time deposit) in a Bank.	A banking company or a co-operative bank or post Office
3	One or more Fixed deposits for ten lakh rupees or more in a financial year in a bank.	A banking company or a co-operative bank or post Office or NBFC.
4	Cash payment aggregating to INR 1 lakh or more in a year or Rs 10 lakh or more in any other mode of payment against any credit card bill which is issued to a customer in a year	A banking company or a co-operative bank or post Office or NBFC or Nidhi Companies
5	Receipt exceeding Rs 10 lakh or more in a year from an individual for acquiring such debentures/bonds	A company or institution issuing bonds or debentures.
6	Receipt from any person of an amount aggregating to ten lakh rupees or more in a financial year for acquiring shares (including share application money) issued by the company.	A company issuing shares.
7	Share buyback from a person for an amount totaling Rs 10 lakh or more	Listed Companies
8	Receipt equal to or exceeding Rs 10 lakh in a year from an individual acquiring the units of such Mutual Fund	Manager/Trustee of a Mutual Fund
9	Receipt from a person for sale of a foreign currency or expenses incurred in such foreign currency via a debit/credit card or via the issue of draft or traveler’s cheque or any other financial instrument for an amount annually totaling Rs 10 lakh or more.	A Registered Foreign Exchange Dealer
10	Sale/Purchase of immovable property for Rs 30 lakhs or more of sale value or value as per the stamp valuation authority.	Sub Registrar
11	Cash receipt exceeding Rs 2 lakh by a person for sale of goods or rendering of services (other than the ones specified above)	Persons liable for audit u/s 44AB of the Income Tax Act

 

Due Date to File Form 61A:

SFT needs to be furnished within 31st May of next year for every previous financial year where the transaction occurs. For example, the last date for filling of SFT for FY 2024-25 is 31st May 2025.

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.

If specified person files inaccurate details in form 61A, then a penalty of Rs.50,000 shall be imposed u/s 271FAA of the Income Tax Act.                    

Form 61A (SFT) and reporting in Tax Audit Report form 3CD:

Notification has been issued CBDT amending the form 3CD with effect from 20th Aug 2019, the Amended form 3CD includes the disclosure on Specific Financial Transactions (SFT) under clause 42 of 3CD.

The clause applies to all taxpayers to whom these forms are applicable & The details of all transactions which are not reported in these forms have to be reported under this clause.

Clause 42: The tax auditor should ascertain whether the assessee is required to report any transactions under section 285BA read with Rule 114E.

If there are any transactions which are required to be reported in SFT the same are not furnished in Form 61A, Tax auditor should furnish list of the details/ transactions which are not reported.