Form 61A is a financial statement that is required to be submitted by ‘specified persons’ such as banks and financial institutions under section 285BA of the Income-tax Act, 1961. This statement compiles information on high-value transactions made by taxpayers, which includes various categories such as cash deposits, withdrawals, property acquisitions, and more. The data collected from Form 61A is used by tax authorities to analyze taxpayer behavior, identify potential tax evasion, and ensure compliance with tax laws. This contributes to the overall effectiveness of tax administration and enforcement efforts.
What is Section 285BA?
As per Section 285BA, along with Rule 114E of the Income Tax Act of 1961, certain entities need to provide details of Specified Financial Transactions (SFTs) or any reportable accounts maintained by them throughout the fiscal year. Form 61A is used to submit this information, which includes multiple sections designed to gather SFT-related data. Form 61A is a comprehensive tool for recording all significant transactions and helps the Income Tax Department keep a check on such activities effectively.
Here, specified financial transaction (SFT) includes:
- Accepting deposits and taking any loans
- Works contract
- Sale/Purchase/Exchange of goods, rights, property, or interest in any certain property
- Providing services
- Any Investments made or expenditures incurred
Who should file Form 61A?
The following are the responsible persons for filing the form 61A:
- NBFCs
- Financial institutions such as Banking companies or Co-operative Banks
- Mutual fund Companies
- Institutions issuing credit cards
- Any person covered under audit u/s 44AB
- Post offices
- A Nidhi company (u/s 406 of the Companies Act 2013)
- A company issuing shares, bonds, and debentures
- Listed companies on the recognized stock exchange
- Mutual fund trustees or an authorized representative of that trustees
- An inspector general or sub-registrar appointed under the Registration Act, 1908
- Off-shore banking units, authorized dealers, money changers, or any other specified person mentioned in FEMA
Transaction to be reported
| Specified Person | Nature of Transaction | Minimum transaction amount limit (INR) |
| Banking companies and Co-operative Banks | Deposits or withdrawals in a financial year from one or more current accounts | 50 Lakhs |
| Banking companies and Co-operative Banks | Cash Payouts for demand drafts, purchase orders, or purchase of RBI investment instruments like RBI bonds. | 10 Lakhs |
| Banking companies, Co-operative Banks, and Post offices | Deposits in a financial year in any bank account other than a current account and time deposit | 10 Lakhs |
| Banking companies, Co-operative Banks, Post offices, and Nidhi company | Payments made against the bill of credit cards issued to a customer in a year | Payments made in: Cash – 1 Lakhs Others – 10 lakhs |
| A company issuing bonds and debentures | Receipts in a financial year from individuals for purchasing bonds and debentures | 10 Lakhs |
| A company issuing shares | Receipts in a financial year from individuals for purchasing shares including share application money received | 10 Lakhs |
| Listed companies | Buy-back of shares | 10 Lakhs |
| Manager/Trustee of Mutual funds | Receipts from individuals purchasing units of mutual funds in a financial year | 10 Lakhs |
| Dealer of Foreign exchange | Receipts from sales of foreign currencies or expenses incurred in the said currencies through credit card/debit card or through the issuance of travelers’ cheques, draft, or other financial instruments | 10 Lakhs |
| Inspector general or sub-registrar registered under the Registration Act, 1908 | Sale or purchase of immovable properties | 30 Lakhs |
| Person liable for audit u/s 44AB of the Income Tax Act | Cash receipts for the sale of goods or rendering services | 2 Lakhs |
Due date and Penalties for Form 61A
The statement of SFT transaction needs to be submitted on or before 31st May of next year for every previous financial year in which the transactions occurred.
If the specified person fails to furnish the statement within the time limit then tax authorities will issue a notice under section 285BA(5) asking them to file Form 61A within 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 500 per day after the date mentioned in the notice for furnishing the statements.
Moreover, if they do not provide any response to such notice, a penalty of INR 1000 per day will be levied from the date of expiry of the period mentioned in the notice.
Inaccurate or Defective Form 61A
If there are any inaccuracies in the provided information in the form after filing it, then the specified person has to notify the prescribed authority within 10 days of discovering such inaccuracy by providing the correct information. Further, if the authority finds any incorrect information in filed form then they may inform the specified person and will provide them an opportunity to correct the same within 30 days from the date of notification or within the extended time period provided by the authority.
If the person does not rectify the inaccuracies within the specified time, the form will be deemed invalid, and it will be considered that the specific person has failed to file the form. However, starting from 1st September 2019, failure to rectify the defects in the form will be deemed as submitting defective/inaccurate information in the form.
Consequences of defective or inaccurate form 61A:
As per section 271FAA of the Income Tax Act, 1961, if the specified person provides inaccurate details and where:
- The inaccuracy arises either due to non-compliance with the due diligence requirements or intentionally made by the individual.
- When an individual is aware of the inaccuracy but neglects to furnish the information to the relevant authority or agency.
- When the discrepancy is identified after the filing of the SFT, and the accurate information is not provided within 10 days.
Then, the prescribed authority may impose a penalty of INR 50,000 to specified persons.
Additionally, from AY 2023-2024, financial institutions responsible for reporting will incur a penalty of INR 5,000 if inaccuracies arise in the form due to incorrect information provided by the account holder of the reportable accounts. Moreover, the reporting financial institution retains the right to recover this penalty from the respective account holder.
Steps to File Form 61A (SFT)
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Register on the Reporting portal under the My Account menu.
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All statements uploaded to the Reporting Portal must adhere to the XML format. And it needs to be consistent with the prescribed schema published by the Income Tax Department.
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After generating the XML file, it should be signed and encrypted using the Submission utility. Subsequently, prepare a package containing the signed and encrypted XML file, which is then ready for uploading.
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Submit the statement on the Reporting Portal.
On successful submission, an email with “Acknowledgment Number” will be sent to the registered email id.
Parts of Form 61A
There are two parts in form 61A:
- Part A: This contains statement level information which is common for all transaction types.
- The report-level information has to be reported in one of the following parts based 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
FAQs
Income Tax Department Reporting Entity Identification Number (ITDREIN) is an identification number assigned to the reporting entity by the ITD. Once the Department assigns ITDREIN, the authorized person is added to the generated ITDREIN, allowing them to submit a valid Form 61A.
If any Individual/Business makes a High-value Transaction, then the Bank/Financial Institutes need to report it to the ITD. Further, the registered PAN of that Person also needs to be mentioned. Hence, ITD can come to know about your “High valued Transactions”
Statement of SFT can be furnished through Form 61A (Part B).
Yes, the specified persons must file the form for Specified Financial Transactions.
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?