Some individuals need to file Form 61A to justify their High-Value Transactions. One can track the status of this filing on the TIN-NSDL website. Entities such as Banks and other Financial Institutes are responsible to furnish certain transaction details through Form 61A (Annual Information Return). Hence, with an aim to curb black money and track high-value transactions, the government has implemented new reporting guidelines. The “High valued transactions” of Individuals and Businesses are monitored u/s 285BA of the Income Tax Act.
Form 61A contains details of the transaction and reportable account maintained by the specified persons during the Financial Year. The Income Tax Department using AIR monitors these High valued transactions.
Who should file Form 61A (AIR)?
According to Section 285BA of the Income Tax Act, 1961, “Specified persons” must record and report “High-value financial transactions” of individuals and file Form 61A, upon receipt of the notice. For instance, these specified persons can be:
- Individuals and Taxpayers
- Banks
- Mutual funds
- Institutions issuing bonds and registrars or sub-registrars
Detailed information on who should file Form 61A (AIR) as per the Tax Information Network (TIN) is as follows:
|
Class of Person |
Nature and value of the transaction |
Clarification by Central Board of Direct Taxes vide circular |
|
A Banking Company to which the Banking Regulation Act, 1949 applies |
Cash deposits of any person totaling INR 10,00,000 or more in a year in the savings account of any bank |
The total of all the cash deposits in the savings account of a person should be reported as one single transaction. However, the date of the transaction should be the last date of the financial year |
|
A Banking Company to which the Banking Regulation Act, 1949 applies or any other Company or Institution issuing the credit card |
If credit card payments against a person are INR 2,00,000 or more in a financial year |
The total of all the payments by a person to the credit card company should be reported as one transaction. And hence the date of the transaction is to be the last date of the financial year |
|
A trustee of a Mutual Fund or such other person managing the affairs of the Mutual Fund as may be duly authorized by the trustee in this behalf |
This is if you are acquiring any units of fund amounting to Rs. 2,00,000 or more in a financial year |
The amount actually received from the transacting party and not the amount relating to the allotment is to be reported |
|
A Company or Institution issuing bonds or debentures |
This is if you are acquiring any bonds or debentures amounting to Rs.5,00,000 or more in a financial year by the Company or institution |
The amount actually received from the transacting party and not the amount relating to the allotment is to be reported |
|
A Company issuing shares through public or rights issue |
If you are acquiring any shares of a company amounting to Rs. 1,00,000 or more |
The amount actually received from the transacting party and not the amount relating to the allotment is to be reported |
|
Registrar or Sub Registrar appointed under section 6 of the Registration Act, 1908 |
If you are purchasing or selling any immovable property that values Rs.30,00,000 or more in a financial year |
Certain situations where the transaction of property valued at Rs. 30,00,000 involves joint parties and value for one or more parties is less than Rs. 30,00,000. In such situations, all such transactions are to be reported even though the value of transaction in the hands of one or more of the joint parties is less than the threshold limit |
|
An officer of the Reserve Bank of India constituted under section 3 of the Reserve Bank of India Act, 1934 who is duly authorized by the Reserve Bank of India on this behalf |
This is applicable if you are acquiring any bonds issued by the RBI amounting to Rs. 5,00,000 rupees or more in a year |
The total of all the receipts from a person is required to be reported as one transaction and the date of the transaction is to be mentioned as the last date of the financial year |
Circumstances under which Form 61A is rejected
The tax authority can reject the Annual Information Return i.e. AIR for the following reasons:
- Filers have to mention the filer’s name, TAN, PAN, Form number, and the Current Financial Year. Any mismatch with the form and file submitted will end up in rejection.
- If the return file provided on Computer media is not generated by the AIR FVU.
- When you don’t file Form 61A (Part A) in the physical paper format along with the AIR file.
- If the authorised signatory has not signed and verified Form 61A (Part A)
- The authorised signatory has not approved the overwriting on Form 61A (Part A)
- When you use more than one computer to file the AIR. Also, when computer media finds your submission corrupted or with any viruses.
- If you compress the AIR file using any other compression utilities than Winzip 8.1 or ZipItFast 3.0 or higher version.
- Mismatch of the total in Form 61A with the total of SAM (Statement Acceptance Module) at the TIN Facilitation Centre.
Consequences of not submitting AIR in time
Tax authorities of India, under section 285BA(5) can issue a notice to a specified person asking them to file Form 61A (Annual Information Return) within a period of 30 days from the date of receiving the notice. If they fail to file the statement within the allotted time then they will face a penalty of INR 1,000 per day after the date mentioned in the notice for furnishing the statements.
Steps to File Form 61A (AIR)
- Visit the TIN-NSDL website
Download your AIR Return Preparation Utility (RPU) available on NSDL
- Next, you download your AIR RPU
This is how your the AIR RPU form will look
- Further, you need to fill in the required details in the given sheets under the downloaded excel file
Post downloading the form
- Next, you need to download the E-AIR FVU application
To do this you need to download the latest JAVA software
- After setting up the application, you can now upload your excel sheet there
If your file has any errors, the application will generate errors through the error file path. All errors need to be cleared in order to have the file accepted.
- Your accepted file needs to be copied on a CD or a Floppy
Lastly, you need to visit the TIN-NSDL AIR section and skip to the 5th step and download Part A of Form 61A
- Next, visit your nearest TIN Facilitation Center (TINFC) and file your AIR return
Now that you have your file on a CD or a Floppy and have your Part A of Form 61A filled.
Track Form 61A Filing Status
- Visit the Tax Information Network Portal and click on services and select Annual Information Return from the dropdown
- Select “AIR status view for filers“
- Enter your PRN i.e. Provisional Receipt Number and valid TAN
FAQs
FVU created by NSDL is a program to verify the format of AIR that the filers submit and to measure its accuracy.
FVU will accept AIR submissions only if it is error-free. If there are any errors in the details, the screen shall display the error code, error description, and details about the error.
You can resubmit your form after correcting the errors. If there remains no error in filing AIR then the “File Validation Successful” message pops up.
If any Individual/Business makes a Financial Transaction that is a “High-value Transaction”, then the Bank and other Financial Institutes are responsible to report the transaction to the ITD, along with the registered PAN of that Person. Hence, ITD can come to know about your “High valued Transactions”
AIR can be furnished through Form 61A (Part B) in a digitized form in a CD/Floppy. While Form 61A (Part A) in a paper format duly signed.
Hey @TeamQuicko
Thanks for the blog! Just one quick question - Why do we have to report a quarterly breakdown of Dividend Income under IFOS?
Thank you!
Hey @TanyaChopra
This quarterly breakdown of Dividend Income under IFOS will help to calculate and determine penalty u/s 234C for the delay in payment of Advance Tax.
Hope this helps!
I had received dividend recently but I had noticed that TDS had been deducted. any idea as to why has it happened and is there a way I can claim this TDS?
Hey @HarshitShah
After the introduction of Budget 2020, dividend income is now taxable in the hands of the shareholder; and is also subject to TDS at 10% in excess of INR 5000 u/s 194 & 194K. Foreign Dividend is taxable at slab rates. TDS is not applicable to such dividends. The taxpayer should report such income under the head IFOS in the ITR filed on the Income Tax Website.
Hope this helps!
Hey @HarishMehta
Yes, dividend income is now taxable from FY 2021-22 onwards and it has to be reported under the head of IFOS.
You can read more about it here:
Hi @Maulik_Padh,
You need to pay Income tax on the net taxable income, i.e. after subtracting deductions, expenses, etc.
If the net taxable income is negative i.e. if there is loss, you can carry it forward when filing the ITR
Here are some of the articles which might help
Hi @ameyj
The amount of TDS deducted shall reflect in your Form 26AS only and it will also reflect the name of the deductor.
Using the name of the deductor you can find out on which share you have received the dividend and you can also cross-check the same in your bank statement.
Yes, you are right, TDS is to be deducted when the dividend paid exceeds 5000 INR in a financial year. However, the 5,000 INR limit pertains to all the dividends an individual gets in a year, or the total dividend per shareholder that a company pays out in a year, is left to interpretation, and hence registrars and share transfer agents (RTA) are not taking any chances and are deducting TDS even on small amounts.
Hope this helps
Hi @ameyj
You can submit a grievance on Income Tax Portal mentioning the issue and also attach the 26AS.
The other option is to leave it as it is and clarify it when the tax department sends the notice.
Hi @TeamQuicko
Consider that I have 10 shares each of 10 different Indian companies. Each of the 10 companies are declaring a dividend of INR 100 before the FY ends. Now I will be recieving 1000 as dividend from each company, thereby a total of 10,000.
The 5,000 dividend limit, is it applicable to each company / total dividend recieved by me in a year. If it is applicable to each company, then I would not attract TDS of 10% for dividend.
Also pl clarify, how would the company B know that I have got shares of Company A,C,D,E so on…
@Saad_C @Laxmi_Navlani @Divya_Singhvi @Kaushal_Soni @AkashJhaveri can you help with this?