As per the amendment to Section 285BA of the Income Tax Act, 1961, specified entities (Filers) are required to furnish an Specified Financial Transactions (SFT) in respect of specified high value financial transactions registered/recorded by them during the financial year (beginning on or after April 1, 2004) to the income tax authority or other such prescribed authority
This declaration form will have to be submitted by an individual who does not hold a PAN number but wishes to enter into transactions mentioned in Rule 114B. Applicants who do not have a General Index Register Number but wish to pay in cash with respect to all transactions mentioned in Clauses (a) to (h) of Rule 114B, will have to submit Form 60.
Form of declaration that is to be filled by an individual who receives income solely from agriculture and is not the recipient of any other income that is taxable, with respect to transactions mentioned in Clauses (a) to (h) Rule 114B.

It includes transactions:

  1. Purchase or sale of immovable property that is worth over Rs.5,00,000.
  2. Purchase or sale of vehicles, other than a two-wheeler.
  3. A fixed deposit that exceeds Rs.50,000 with any bank.
  4. A fixed deposit account that exceeds Rs.50,000 with the Post Office.
  5. Contract related to purchase or sale of specified securities that exceed Rs.10,00,000.
  6. This form is required for opening an account with a bank.
  7. Applications for installing a telephone connection(includes cellular connection) requires this form.
  8. Payments that exceed Rs.25,000 to restaurants and hotels.

961 by ‘specified persons‘ in respect of ‘specified transactions‘ registered or recorded by them during the financial year.

New Rule 114E of the income tax rules requires all assessees liable for tax audit u/s 44AB will have to file Specified Financial Transactions in Form 61A, in case of receipt of cash payment exceeding of Rs. 2,00,000/- for sale of goods/services of any nature.

Form 61AB is furnished in case of any transaction made by an individual/ corporation using products such as Debentures, Debit Card, Credit Card, Time Deposit, Shares bought back, Foreign Currency sale etc.

As per new rule following persons shall be required to furnish Specified Financial Transactions or reportable accounts registered or recorded or maintained by them during a financial year to the prescribed authority on or after 1st day of April, 2016

Entities include:

  1. Banking company
  2. Co-operative bank
  3. Depository
  4. Government
  5. Insurer
  6. Mutual Fund
  7. NBFC/Nidhi
  8. Post Office
  9. Reserve Bank of India
  10. Securities market intermediary
  11. Others

S.No. Transaction Type

  1. Payment of cash aggregating Rs. 10,00,000 or more in a year for purchase of DD, Pay Orders, Bankers Cheques.
  2. Payment made in cash aggregating to Rs. 10,00,000 or more in a year for purchase of pre-paid instruments issued by RBI
  3. A cash deposit aggregating to Rs. 10,00,000 or more in a year in one or more bank accounts (other than current account or time deposit)
  4. A Cash deposit aggregating to Rs. 50,00,000 or more in a year in one or more current account of a person
  5. A Cash withdrawal aggregating to Rs. 50,00,000 or more in a year from one or more current account of a person
  6. One or more-time deposit (other than renewal) aggregating to Rs. 10,00,000 or more of a person
  7. Credit card payment made by any person aggregating to Rs. 1,00,000 or more in a year in cash or Rs. 10,00,000 or more by any other mode
  8. Receipt from any person of an amount aggregating to Rs.10,00,000 or more for acquiring bonds or debentures issued.
  9. Receipt from any person of an amount aggregating to Rs. 10,00,000 or more in a year for acquiring shares issued by the company (including share application money)
  10. Buy back of shares from any person (other than the shares bought in the open market) for an amount or value aggregating to Rs. 10,00,000 or more in a year.
  11. Receipt of an amount aggregating Rs. 10,00,000 or more for acquiring units of one or more schemes of a Mutual Fund. (other than switching of funds from one scheme to another)
  12. Receipt from any person for sale of foreign currency or expense in such currency through a debit or credit card or through issue of travelers cheques or draft or any other instrument of an amount aggregating to Rs. 10,00,000 or more in a year
  13. Purchase or sale by any person of immovable property for an amount of Rs. 30,00,000 or more or valued by the stamp valuation authority referred to in section 50C of the Act at Rs. 30,00,000 or more
  14. Receipt of cash payment exceeding Rs. 2,00,000 for sale of goods or providing services of any nature other than those specified above

DO's

  1. Preparation of Specified Financial Transactions (Original SFT
    1. Prepare the return as per the file format notified by ITD.
    2. SFT must be filed by the principal office of the person responsible for filing SFT. Only one return must be filed for the whole organization.
    3. Quote Permanent Account Number (PAN) of the filer correctly. It is mandatory for non-government filers.
  2. Furnishing of Specified Financial Transactions. Copy the .fvu file on a floppy / Compact disk (CD) and affix a label mentioning the TAN, Financial Year, Form No., Name of the Filer and furnish the same along with Form 61A (Part A) with any TIN-Facilitation Centres (TINFCs).

DON'Ts

  1. Do not furnish the return in a format other than ASCII text format. This means excel, word files etc., will not be accepted. In case you are using NSDL RPU which is an excel based utility, after the data has been entered correctly, click the "create file" icon to generate the ASCII text file.
  2. Do not furnish the return without validating it using latest FVU.
  3. Do not make mistake in TAN of the filer quoted in the return.
  4. Do not file separate return for each branch of the filer.
  5. Do not file separate return for each type of transaction by the same filer.
  6. Do not forget to collect Provisional Receipt/ Non Acceptance Memo from the TIN-FC.

ITDREIN:

ITDREIN is the Unique ID issued by ITD which will be communicated by ITD after the registration of the reporting entity with ITD. The ITDREIN is a 16-character identification number in the format XXXXXXXXXX.YZNNN where

XXXXXXXXXX PAN or TAN of the reporting entity
Y Code of Form Code
Z Code of Reporting Entity Category for the Form Code
NNN Code of sequence number.

PAN:

A Permanent Account Number or PAN is a unique 10 digit alphanumeric code which is provided to every taxpayer or assessee in the country. It is issued by the Income Tax Department and is a mandatory requirement for every entity indulging in economic activity beyond a certain financial limit in the country.

Purpose: PAN acts as a universal identification code for financial transactions

Laws which it accounts: Section 139 A of the IT Act of 1961

TAN:

Tax Deduction and Collection Account Number or TAN is a unique 10 digit alpha numeric code whose primary purpo

Purpose: Streamline deduction and collection of tax at source

Laws which it accounts: Section 203A of Income Tax Act of 1961

Is PAN of the transacting Parties to be quoted in SFT?

The filer shall also quote the Permanent Account Number (PAN) of all persons in respect of whom the prescribed transactions has been registered or recorded by him, except:

In respect of cases to which third proviso to Rule 114B or sub rule (1) of Rule 114C applies, in which case he shall mention in the SFT as to whether Form No. 60 referred to in third proviso to Rule 114B or Form No. 61 referred to in clause (a) of sub rule (1) of Rule 114C, as the case may be, has been received; &

In cases of Government departments/consular offices in which case he will indicate so in the prescribed manner in the SFT.

In the case of transactions involving joint parties, the filer shall

If the share of each of the joint parties is specified and known, give separate line item for each party involved in the joint transaction and mention the separate transaction amount relating to that party; or

If the shares of the parties to the joint transaction are undefined, give particulars (except amount) of all the joint parties as separate line items and mention the transaction amount against the first named party alone.

The SFT-FVU will generate an upload file with the same filename as the ‘input file’ but with extension ‘.fvu’. (Example, ‘input file’ name is FORM61A.txt, the upload file generated will be FORM61A.fvu). This upload file is required to be furnished, either with the front offices of NSDL called TIN Facilitation Centres (TIN-FCs)

The SFT will not be accepted in the following cases:

  1. Improper label affixed on the computer media. Label must have Filer’s name, TAN, PAN (except Government Filers), Form No. and Financial Year.
  2. Computer media not submitted or found to be corrupted or contains virus or is non-readable.
  3. More than one computer media is used for furnishing one SFT.
  4. Physical Form 61A (Part A) not submitted along with SFT file.
  5. Form 61A (Part A) not duly filled in or signed/verified.
  6. Overwriting/striking on Form 61A (Part A) not ratified by person who has signed Form 61A (Part A).
  7. SFT file compressed using compression utilities other than Winzip 8.1 or ZipItFast 3.0 or higher version.
  8. The return file present on the computer media is not the uploaded file generated by the SFT FVU.
  9. Mismatch of PAN or TAN mentioned on Form 61A (Part A) with SFT file.
  10. Mismatch of name of filer mentioned on Form 61A (Part A) with SFT file but no document submitted in support of name appearing on Form 61A (Part A).
  11. Mismatch of control totals mentioned on Form 61A (Part A) with the totals displayed by SAM (Statement Acceptance Module) at the TIN Facilitation Centre.
  12. Financial Year is not valid.

Mapping between Transacting party- PAN- 60/61

Sr. No. Type of Transacting Party PAN Form 60/61 Remarks
1 Government Optional NULL File - Accepted
2 Non-Government Valid NULL File - Accepted
3 Non-Government NULL Y File - Accepted
4 Non-Government NULL N File - Rejected

In case of SFT being prepared by Banking Company, Credit Card Company or Authorised Officer of Reserve Bank of India:

  1. Various transactions pertaining to one saving account, one credit card or one person occurred during the relevant financial year should be reported as a single transaction with total value.
  2. The transaction date in such cases (i.e. cases where more than one transaction are reported as a single transaction) should be the last date of the financial year e.g. 31-03-2005 for F.Y. 2004-05.
  3. The mode of transaction in such cases (i.e. cases where more than one transaction are reported as a single transaction) the mode by which the last transaction is recorded should be mentioned in the return.
  4. In such cases, where the address of the transacting party changes during the financial year, the latest address should be mentioned in the return.
  1. The details of both buyer and seller should be given as two separate transactions (with same transaction value) under respective transaction codes (006 for purchase and 007 for sale).
  2. The value of transaction being provided should be the value considered for assessment of stamp duty.
  3. If there are more than one buyer and/or seller involved in the transaction (i.e. joint party transaction), details of each buyer/seller should be given in the return.
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