Form 61A: Statement Of Specified Financial Transactions

Form 61A is a legal document filed by the taxpayer and entities to report specified transactions under section 285BA of the Income Tax Act. This form is one of many measures that the IT department of India is taking to ensure that individuals do not evade taxes by helping the department monitor SFTs, which are specified financial transactions or high-value transactions.

Statements of financial transactions were previously called Annual Information Return (AIR). In this blog, we will delve into Form 61A, covering its transactions, filing requirements, and more.

What is Form 61A?

It is a legal document in which the details related to the specified financial transactions are to be filled under section 285BA of the Income Tax Act. This form further helps the income tax department to identify and monitor the high-value transactions and then compare them along with the rest of the income reported by the individual in their income tax return. In cases where higher-value transactions and other reported income do not reconcile, the department sends a notice to the person.

In a nutshell, the Form 61A acts as a medium between the reporting entities and the Income Tax Department. It ensures transparency and facilitates the department in identifying any discrepancies between the high value and the reported income of an individual or an entity.

What are Specified Financial Transactions?

The SFTs or the specified financial transactions we read above are of the following kinds:

• Purchase, sale, or exchange of goods, property, right, or interest in any property.
• Providing services
• Work Contracts
• Any expenditure incurred or an investment made
• Taking any loan or accepting any deposit

However, ensure that the CBDT (Central Board of Direct Taxation) can recommend different values considering the different transactions for different persons, depending on the nature of transactions made.

Parts of Form 61A

Form 61A has four parts:

Part A: This part contains the statement-level information that is common to all types of transcriptions.

Now, the report level information, depending on the type of transactions, must be reported in any one of the following parts:

Part B: This part is for reporting the aggregated financial transactions.

Part C: This part is for reporting the bank accounts.

Part D: This part is for reporting immovable property transactions.

Who Must File Form 61A?

The entities and individuals mentioned below are required to file their Form 61A of the IT Act mandatorily.

• Person obligated for audits under section 44AB of the Income Tax Act.
• Banking Company
• Co-operative Bank
• The Post Master General of the Post Office
• Nidhi Company is referred to under section 406 of the Companies Act 2013.
• NBFC (Non-banking Financial Company)
• The company or the institution that issues debentures or bonds.
• The company issuing the shares.
• A listed company that has been listed in a recognized stock exchange, which is purchasing its securities under section 68 of the Companies Act 2013.
• Trustee of a Mutual Fund or such person managing the affairs of the mutual fund.
• Any authorized person under FEMA (money changer, dealer, offshore banking unit, or any other person defined in FEMA, 1999).
• Inspector-General/Sub-Registrar, Registrar appointed under the Registration Act 1908.
• A bank, banking company, or any other institution or company issuing a credit card.

What is the Due Date to File Form 61A

The due date to furnish the statement of the financial transaction shall be furnished on or before the 31st May of the next year for the last financial year in which the transaction occurred.

• If the concerned taxpayer or the entity fails to file within the due date, a penalty of Rs 500 per day shall be imposed under Section 271FA. Following this, the designated authorities will issue a notice requesting that the concerned person submit the form within 30 days.
• In a case where the assesse does not answer and take the stated actions, the penalty of Rs 1000 per day will be imposed. The penalty will be calculated after the 30-day timeframe mentioned in the notice has expired.

What Transaction Should be Reported in Form 61A?

Any transaction that has been incurred by the specified person of the nature or the value mentioned in the table below is called the SFT. These are transitions that must be repeated while filing Form 61A.

How to Register for Statement of Financial Transactions Filing Online

The reporting person or entity must register with the income tax department and obtain an Income Tax Department reporting entity identification number (ITDREIN). Once the number has been generated, the concerned party cannot deactivate it. To register for SFT online, follow the steps given below:

Step 1: Log in to the e-filing website using the login ID associated with the ITR filing of the reporting entity or the person. 

Step 2: Now, click on the My Account tab and then select the Report portal link to access the reporting portal for the first time registration.

Step 3: Now, you have to enter the details, which are the form type, category, address of the reporting entity or the person, along with the details of the principal officer.

Step 4: Once the submission has been successful, the ITDREIN will be generated. The principal officer will receive a confirmation at their registered email address and an SMS at their registered mobile number.

Now, please ensure that registering for the SFT filing only curates your account. You still need to accumulate and upload the SFT data, which are the transactions exceeding thresholds, and then upload it by using the reporting portal in the designated filing period.

How to File Form 61A Online?

To file Form 61A, download the prescribed schedules, validation utility, report generation, and generic submission utility from the reporting portal, located under the Resources tab.

Then, the transaction-specific and general SFTs will be generated in a specific format according to the preparation guidelines.

The concerned party must then upload the prepared and digitally signed SFTs to the reporting portal after logging in with the PAN and password of the designated director.

Once the filing has been successfully done, an Acknowledgement Number will be sent to the registered email ID.

Penalty for Filing a Defective Form 61A

If an infringement or a concerned entity has filed a defective Form 61A, the Income Tax Department will first inform the concerned party about the defect in the form. They will then provide the party a window of 30 days to rectify the errors and resubmit the information.

Under section 285BA(1), if a person files any inaccurate details in the form, then a penalty of Rs 50,000 will be imposed on them under section 271FAA of the Income Tax Act.

For default due to providing inaccurate information, a penalty of Rs 500 every day will be imposed from the initial date of the due date mentioned in the notice. Then a penalty of rupees 1000 will be imposed every day if the due date mentioned in the notice is not met.

Let the Experts File Form 61A - Zero Stress and No Hassle

Undisclosed income, tax evasion, and corruption are eroding the backbone of the Indian economy. To counter these issues, the Income Tax Department of India has made it mandatory for taxpayers to comply with the rule of providing data on SFTs through Form 61A.

Just as it is essential to file the ITR, it is also important to consider all aspects of income and relevant sections of the income tax laws to ensure compliance as an NRI. We understand that all of this might feel overwhelming, and hence, to escape, you need an NRI-specific taxation firm.

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