Understanding SFT Filing for FY 2024–25: Applicability, Reporting Obligations & Due Dates

Introduction

In the evolving landscape of financial compliance, the Statement of Financial Transactions (SFT) has emerged as a vital tool for the Income Tax Department to ensure tax transparency. Introduced under Section 285BA of the Income Tax Act, 1961, SFT mandates certain individuals and institutions to report high-value transactions.

What is SFT?

The Statement of Financial Transactions (SFT), formerly known as Annual Information Return (AIR), is a statement submitted to the Income Tax Department detailing specified high-value financial transactions. These transactions are cross-verified with the taxpayer’s Income Tax Returns (ITRs) to detect inconsistencies, under-reporting, or tax evasion.

Who is Required to File SFT?

Entities obligated to file SFT include:

– Banks and Co-operative Banks
– Post Offices
– Companies issuing shares or debentures
– Mutual Fund Houses
– Registrar/Sub-Registrar
– Credit Card Issuers
– Authorized Dealers in Foreign Exchange
– Entities liable to audit under Section 44AB
– High Net-Worth Individuals, depending on transaction thresholds

Why is SFT Reporting Important?

– Enhances financial transparency and accountability
– Facilitates verification of tax returns
– Prevents under-reporting of income and tax evasion
– Ensures equitable tax collection across the economy

List of Reportable Transactions & Thresholds

A Key Reportable SFT Transaction

Among the many reportable financial activities under the Statement of Financial Transactions (SFT) regime, the issue of shares by a company amounting to ₹10 lakhs or more stands out as one of the most frequently encountered transactions, especially among startups, private limited companies, and businesses raising capital.

Form and Mode of Filing

– Prescribed Form: Form 61A
– Portal on which form has to be filed: Income Tax e-Filing Portal
– Verification Mode: Digital Signature Certificate (DSC) or Electronic Verification Code (EVC)

Due Date for FY 2024–25

📅 May 31, 2025

Essential Documents Required

– PAN and basic identification of the reporting entity
– Account statements and transaction records
– Sale/purchase agreements, if applicable
– Form 61A and DSC for online submission

How to Prepare for SFT Compliance

– Identify and monitor all high-value transactions regularly
– Maintain accurate records and documentation
– Evaluate applicability with the help of a tax professional
– Submit Form 61A before the deadline
– Review the AIS/TIS (Annual Information/Taxpayer Information Statement) for any pre-filled data

Frequently Asked Questions (FAQs)

Q: How do I know if a transaction is reportable?

A: You need to monitor your annual financial activity and compare it against the thresholds listed by the Income Tax Department. It is advisable to consult with a tax expert.

Q: What is the penalty for late filing of SFT?

A: Under Section 271FA, a penalty of ₹500/day is applicable for late filing. If the delay continues after receiving a notice, the penalty may increase to ₹1,000/day.

Q: Can individuals be required to file SFT?

A: Yes, if the individual’s transactions exceed the prescribed thresholds and they are subject to tax audit, they may be required to file SFT.

Q: Is SFT applicable to NRI transactions?

A: Yes, if an NRI engages in specified transactions in India that cross the prescribed limits, such transactions must be reported by the relevant entity.

Q: Can I revise an SFT filing?

A: Yes, revised Form 61A can be filed if an error or omission is discovered before the due date.

Q: Are all SIPs in mutual funds reportable?

A: Only if the total SIP investments in a financial year exceed ₹10 lakh.

Q: What is the relevance of AIS/TIS?

A: The Annual Information Statement (AIS) and Taxpayer Information Summary (TIS) help taxpayers cross-verify their reported transactions before filing ITRs.

Conclusion

Filing the Statement of Financial Transactions (SFT) is not merely a legal formality—it plays an important role in enhancing the accountability and efficiency of the Indian taxation system. Staying compliant helps avoid penalties and ensures a hassle-free tax assessment process. Early preparation, ongoing transaction monitoring, and consultation with tax professionals are key to seamless compliance.

If you are unsure whether SFT filing applies to you or need assistance with the process, our team of experts at Chhota CFO is here to guide you. Reach out to us today to stay ahead in your compliance journey.