Statement of
Financial Transactions
(SFT) — Form 61A Guide
Form 61A (Statement of Financial Transactions / SFT) is a mandatory annual return filed by banks, financial institutions, registrars, companies, and other specified entities under Section 285BA. It reports high-value transactions to the Income Tax Department, which reflects them in the taxpayer's AIS (Annual Information Statement). Due: 31 May every year. TAXAJ's CA team handles ITDREIN registration, XML preparation, and filing.
Statement of Financial Transactions (SFT) — Complete Guide to Form 61A
The Statement of Financial Transactions (SFT) — filed in Form 61A — is a compliance mechanism under Section 285BA of the Income Tax Act, 1961 read with Rule 114E of the Income Tax Rules, 1962, through which specified entities are required to report high-value financial transactions to the Income Tax Department. The SFT framework was introduced under "Project Insight" — the MCA/IT Department initiative to track high-value transactions, curb tax evasion, and ensure accurate ITR filing across India.
Before Form 61A, this mechanism was known as the Annual Information Return (AIR), which was in place since April 1, 2004. The AIR was replaced by the more comprehensive SFT framework with effect from April 1, 2016, under the Income-Tax (Sixth Amendment) Rules, 2016, significantly expanding the types of transactions and entities required to report.
What Is ITDREIN?
ITDREIN (Income Tax Department Reporting Entity Identification Number) is a unique identification number assigned to every reporting entity by the Income Tax Department when they register on the Reporting Portal (report.insight.gov.in). Every entity required to file Form 61A must first obtain an ITDREIN before they can file. The ITDREIN is entity-specific and Form-type-specific — if an entity files both Form 61A and Form 61B, they get separate ITDREIN for each. The authorised person of the reporting entity must be added to the ITDREIN to submit valid statements.
Form 61 vs Form 61A vs Form 61B — Key Differences
Three Forms are used under the SFT/reporting framework — knowing which one applies to you is critical:
- Form 61 — Filed by entities that receive Form 60 (declaration by persons not having PAN). Must be filed half-yearly (for Oct–Mar by Apr 30, for Apr–Sep by Oct 31).
- Form 61A — Filed by specified reporting entities for Statement of Specified Financial Transactions. Annual — due by 31 May following the financial year.
- Form 61B — Filed by Reporting Financial Institutions (RFIs) for Statement of Reportable Accounts under FATCA/CRS (for Non-Residents). Annual — due by 31 May. NIL filing IS mandatory for Form 61B (unlike 61A).
Who Must File Form 61A (SFT)?
Under Rule 114E, the following "specified persons" must file Form 61A if they record or register specified financial transactions during the financial year:
- Any person liable for audit under Section 44AB (Tax Audit applicable) who deals in specified transactions
- A banking company or a co-operative bank
- Post offices issuing cash certificates, time deposits, etc.
- Non-Banking Financial Companies (NBFCs)
- A company or institution issuing credit cards
- Listed companies under Section 68 of Companies Act (buyback of own securities)
- Trustees of a Mutual Fund or persons managing Mutual Fund affairs
- Inspector-General, Registrar, or Sub-Registrar appointed under the Registration Act, 1908
- Authorised Dealers, Money Changers, or Off-shore Banking Units under FEMA, 1999
Which Form Do You File? — 61, 61A, or 61B?
A common confusion among reporting entities. The three forms serve entirely different purposes — selecting the wrong form leads to invalid filing and penalties.
Form 61
Filed by entities that receive Form 60 (declaration submitted by persons who don't have a PAN when entering into high-value transactions). Captures details of transactions where PAN was not provided.
- Filed half-yearly: Apr–Sep by Oct 31, Oct–Mar by Apr 30
- Property registrars receive Form 60 when buyer/seller has no PAN
- Banks receive Form 60 for cash transactions above ₹50,000
- Not related to specified financial transactions (that's Form 61A)
- Filed on Income Tax Reporting Portal using DSC
Form 61A
The primary SFT form. Filed by banks, NBFCs, registrars, mutual funds, and other specified entities to report high-value financial transactions — cash deposits, property deals, mutual fund investments, share transactions etc. Data feeds into every taxpayer's AIS.
- Annual — due by 31 May following the FY
- Filed for SFT codes 001–016 (specified transaction types)
- NIL return NOT mandatory (official IT Dept position)
- Filed via Reporting Portal using ITDREIN + DSC
- Covers ~16 categories of high-value transactions
Form 61B
Filed by Reporting Financial Institutions (banks, NBFCs, insurance companies, custodians) for accounts held by non-residents or foreign entities under FATCA (US) and CRS (OECD) frameworks for cross-border tax information exchange.
- Annual — due by 31 May following the calendar year
- NIL return IS mandatory even if no reportable accounts
- Applicable to banks with foreign account holders (US/OECD countries)
- Covers non-resident deposit accounts, investment accounts, insurance policies
- Filed for calendar year (Jan–Dec), not financial year
Which Transactions Must Be Reported? — SFT Codes 001 to 016
Rule 114E specifies 16 categories of transactions. Click each category to see the applicable threshold, who reports it, and the SFT code.
| SFT Code | Transaction Type | Threshold | Who Reports |
|---|---|---|---|
| SFT-001 | Cash deposits in savings accounts | ≥ ₹10 lakh in a FY (aggregate, all accounts of same person) | Banking companies, co-operative banks, post offices |
| SFT-002 | Cash deposits in FDs / term deposits | ≥ ₹10 lakh in a FY (per person, across multiple deposits) | Banking companies, co-operative banks, post offices |
| SFT-003 | Cash payment for purchase of bank drafts / prepaid instruments | ≥ ₹10 lakh in a FY | Banking companies, co-operative banks |
| SFT-004 | Cash withdrawals from savings accounts (aggregate) | ≥ ₹10 lakh in a FY | Banking companies, co-operative banks |
| SFT-005 | Time deposits opened / renewed (excluding cash) | ≥ ₹10 lakh in a FY (aggregate) | Banking companies, co-operative banks, post offices, Nidhi companies |
| SFT-016 | Cash deposits in current accounts (demonetisation era — still active) | ≥ ₹12.5 lakh (single account) or ₹25 lakh across all accounts | Banking companies, co-operative banks |
| SFT Code | Transaction Type | Threshold | Who Reports |
|---|---|---|---|
| SFT-012 | Purchase or sale of immovable property | Property value ≥ ₹30 lakh per transaction | Inspector-General / Registrar / Sub-Registrar under Registration Act |
| SFT Code | Transaction Type | Threshold | Who Reports |
|---|---|---|---|
| SFT-006 | Purchase of shares through public / rights / bonus issues | ≥ ₹10 lakh in a FY per person | Company listed on recognised stock exchange (for own shares) |
| SFT-007 | Purchase of debentures / bonds | ≥ ₹10 lakh in a FY per person | Company issuing debentures/bonds |
| SFT-008 | Buyback of shares from shareholders | ≥ ₹10 lakh in a FY per person | Listed company conducting buyback under Sec 68 Companies Act |
| SFT-009 | Purchase/redemption of mutual fund units | ≥ ₹10 lakh in a FY per person (all transactions) | Trustee of a Mutual Fund / MF company |
| SFT-010 | Dividend received on shares / units | ≥ ₹10 lakh in a FY per person | Companies / Mutual Funds paying dividend |
| SFT-011 | Interest received from banks / post offices | ≥ ₹10 lakh in a FY per person | Banking companies, post offices |
| SFT Code | Transaction Type | Threshold | Who Reports |
|---|---|---|---|
| SFT-013 | Cash payments for credit card bill | Cash payment ≥ ₹1 lakh in a FY for a single person | Banking company or institution issuing credit cards |
| SFT-014 | Credit card payments (non-cash) — aggregate | ≥ ₹10 lakh in a FY | Banking company or institution issuing credit cards |
| SFT-015 | Purchase of foreign currency / travel cards / bank drafts (cash) | ≥ ₹10 lakh in a FY per person (aggregate) | Authorised dealers, money changers, offshore banking units under FEMA |
| SFT Code | Transaction Type | Threshold | Who Reports |
|---|---|---|---|
| SFT-013 | Cash payment for goods and services (by Section 44AB taxpayers) | ≥ ₹2 lakh per person per transaction | Any person liable for audit under Section 44AB |
| Multiple | Tax Audit Assessees reporting cash transactions | Various — ₹2 lakh per transaction threshold applies | Any person liable for audit under Section 44AB |
| Form 61 | Transactions where Form 60 received (no PAN) | No threshold — every Form 60 must be reported | Any person receiving Form 60 (banks, registrars, dealers) |
How SFT Data Feeds Into Your AIS — Annual Information Statement
This is the most critical and least explained aspect of SFT. Every SFT filed by reporting entities automatically populates the taxpayer's AIS — the IT Department's comprehensive financial profile of every taxpayer.
🔗 The SFT → AIS → ITR Chain — What It Means for You
📊 Step 1: Reporting Entity Files SFT
Your bank reports ₹15 lakh cash deposit in SFT-001. Your mutual fund reports ₹12 lakh purchase in SFT-009. Your property registrar reports ₹45 lakh sale in SFT-012. All filed by 31 May.
📱 Step 2: Data Appears in Your AIS
Within weeks, all SFT data about you is reflected in your AIS (Annual Information Statement) on income.tax.gov.in. You can view, download, and compare all financial data the IT Department has received about you.
💵 Step 3: You File ITR — Must Match AIS
When you file your Income Tax Return, the system compares your declared income/transactions with AIS. Any mismatch — undisclosed capital gains, unexplained deposits, large unreported investments — triggers automated notices.
⚠️ Step 4: AIS Mismatch → IT Notice
The IT Department sends notices under Section 133(6) or 148 if AIS shows income/transactions not reflected in ITR. Responding to such notices requires documentation and explanation of all transactions. TAXAJ handles AIS mismatch resolution and income tax notice responses.
How to File Form 61A (SFT) — Complete Step-by-Step Process
TAXAJ handles Steps 1–5 for reporting entities. You provide transaction data — we handle ITDREIN registration, XML generation, and portal submission.
Register on the Reporting Portal & Obtain ITDREIN
The first step is to register on the Income Tax Reporting Portal at report.insight.gov.in to obtain an ITDREIN. Navigate to the portal, click "Register" and select the entity type (company, bank, mutual fund, etc.). Provide PAN of the entity, designation and details of the Principal Officer / Authorized Person, and their DSC certificate. Upon successful registration, the IT Department assigns an ITDREIN (e.g., AAAA1234A.SFTA.1). The authorised person receives login credentials and an email confirming ITDREIN activation. Each Form type (61A, 61B, 61) requires a separate ITDREIN if the same entity files multiple forms.
Compile Transaction Data — Match to SFT Codes
Extract transaction data from your internal systems for the financial year. For each category of reportable transaction (SFT-001 through SFT-016 as applicable), identify all persons/transactions that crossed the threshold. For banks: pull cash deposit summaries per customer for FY. For registrars: pull all property transactions registered above ₹30 lakh. For mutual funds: pull all investor purchase/redemption summaries above ₹10 lakh. Compile person-wise data including: PAN of the transacting person, name, address, amount, date, and nature of transaction. Transactions must be aggregated per person across the year (not per transaction) for most SFT categories.
Download & Use the Report Generation Utility
Download the Report Generation Utility (Java-based desktop tool) from the Reporting Portal. This utility enables you to create and validate the XML file required for Form 61A submission. Open the utility, select Form 61A, enter the ITDREIN, PAN of reporting entity, financial year, and then input the transaction data in the specified format. The utility validates the data against the prescribed XML schema and generates an XML file. Ensure the XML is saved with the .xml extension. Common errors: missing PAN of transacting party, incorrect aggregation, wrong SFT code for transaction type.
Sign & Encrypt XML Using Generic Submission Utility
The generated XML must be digitally signed and encrypted before submission. Use the Generic Submission Utility (also available on the Reporting Portal) to sign the XML using the Principal Officer's DSC (Digital Signature Certificate). Select the authorized person type, browse to the XML file, and the utility creates a signed and encrypted package. This signed package is what gets uploaded to the Reporting Portal. Ensure the DSC is valid and not expired — an expired DSC causes submission failure. The Principal Officer must be the same person who was registered during ITDREIN setup.
Upload on Reporting Portal — Download DQR
Log in to the Reporting Portal at report.insight.gov.in using your ITDREIN credentials. Navigate to "Upload Statement", select Form 61A, and upload the signed XML package. The portal processes the file and generates a DQR (Data Quality Report) — download this after 24 hours (the portal recommends waiting 24 hours for DQR generation). Review the DQR: it shows the number of records accepted, rejected, and errors. If records are rejected (due to PAN errors, format issues, etc.), prepare a correction statement and re-upload. Preserve the submission acknowledgement number (SRN) as proof of filing.
Non-Filing or Inaccurate SFT — Penalties Under Section 271FA & 271FAA
Section 271FA — Late Filing Penalty
Failure to file SFT (Form 61A) by 31 May: IT Authority may serve a notice requiring filing within 30 days. If filed within notice period: ₹500 per day from 31 May to date of filing. If not filed even after notice: ₹1,000 per day from the day after notice expiry. No maximum cap — penalties compound rapidly.
₹500/day before notice → ₹1,000/day after noticeSection 271FAA — Inaccurate Information
Penalty of ₹50,000 if: (a) inaccurate information is provided in SFT and known at time of filing, (b) inaccuracy discovered later but not corrected within 10 days of discovery. Additional penalty of ₹5,000 per Reporting Financial Institution (w.e.f. A.Y. 2023-24) if inaccuracy is due to false info submitted by account holder.
₹50,000 + ₹5,000 (RFI) per inaccuracyInvalid SFT — Defective Filing
If the IT Authority finds the SFT defective, they intimate the entity and give 30 days to rectify (extendable). If defect not rectified within the extended period, the SFT is treated as invalid / not filed — penalties as if not filed apply. From September 1, 2019: failure to rectify = submission of inaccurate information.
Invalid filing = non-filing · 30-day rectification windowAIS Population — Tax Impact on Taxpayers
If a bank or registrar fails to file accurate SFT, the taxpayer's AIS will be missing the transaction. When the IT Dept later discovers it (through other means), it creates a larger discrepancy. Conversely, inaccurate SFT data in AIS may cause innocent taxpayers to receive wrongful notices requiring documentation and explanation.
AIS accuracy = Taxpayer compliance riskProsecution Risk — Section 285BA
Willful failure to furnish SFT — despite notice — can lead to prosecution under Section 285BA(5). This is separate from the civil penalties under Section 271FA. Prosecution is rare but applicable in cases of deliberate non-reporting of large transactions by financial institutions.
Prosecution possible · Willful non-complianceScrutiny of Taxpayers — Section 133(6)
Even if the reporting entity files correctly, taxpayers with large transactions in AIS who don't explain them in their ITR receive notices under Section 133(6) requiring information. TAXAJ's team responds to such notices with proper documentation and AIS reconciliation.
Sec 133(6) notice → explain or face additions| Default | Section | Penalty | Effective From |
|---|---|---|---|
| Filing Defaults | |||
| Late filing (before notice) | 271FA | ₹500 per day from due date | 01-04-2016 |
| Late filing (after notice — within 30 days) | 271FA | ₹500 per day (continued) | 01-04-2016 |
| Non-filing (after notice period lapses) | 271FA | ₹1,000 per day from notice expiry | 01-04-2016 |
| Inaccuracy Penalties | |||
| Inaccurate information in SFT | 271FAA | ₹50,000 per instance | 01-04-2016 |
| RFI inaccuracy due to false account holder info | 271FAA | ₹5,000 additional (recoverable from account holder) | 01-04-2023 |
| Failure to correct within 10 days of discovery | 271FAA | ₹50,000 penalty applies | 01-10-2024 |
Form 61A / SFT — Frequently Asked Questions
Form 61A / SFT Filing — TAXAJ Services
Whether you're a reporting entity needing to file Form 61A or a taxpayer with AIS discrepancies to resolve, TAXAJ's CA team provides complete SFT compliance support.
- ✓ITDREIN registration on Reporting Portal
- ✓SFT code identification for your transactions
- ✓XML generation using Report Generation Utility
- ✓DSC signing + portal upload
- ✓DQR download + correction if needed
- ✓All Starter services
- ✓Data cleaning + PAN verification
- ✓Multiple SFT codes handled
- ✓DQR error resolution + re-upload
- ✓Correction statement if required
- ✓Full AIS download + review
- ✓SFT data vs ITR mismatch analysis
- ✓Advice on disclosure in ITR
- ✓IT notice response drafting
- ✓ITR filing included