Section 285BA of the Income Tax Act, 1961, mandates specified entities to report high-value financial transactions to the tax authorities. This helps curb tax evasion and ensures transparency. Below are the key provisions:
1. Who Must File?
The following “specified persons” must report transactions:
- Banks & Co-operative Banks(cash deposits, withdrawals, credit card payments) .
- Post Offices(time deposits ≥ ₹10 lakh) .
- Registrars/Sub-Registrars(property transactions ≥ ₹30 lakh).
- Mutual Funds & Companies(investments in shares/bonds ≥ ₹10 lakh) .
- Credit Card Issuers(payments ≥ ₹1 lakh cash or ₹10 lakh non-cash annually) .
- Authorized Forex Dealers(foreign currency transactions ≥ ₹10 lakh) .
2. Specified Financial Transactions (SFTs)
Transactions exceeding these thresholds must be reported:
| NATURE OF TRANSACTION | THRESHOLD (₹) | REPORTING ENTITY |
| Cash deposits (savings/current account) | ≥10 lakh (savings), ≥50 lakh (current) | Banks |
| Fixed/Time deposits | ≥10 lakh | Banks, NBFCs |
| Property purchase/sale | ≥30 lakh | Registrars |
| Mutual fund/equity investments | ≥10 lakh | AMCs, Companies |
| Credit card payments (cash) | ≥1 lakh | Card issuers |
| Goods/services (cash receipts) | ≥2 lakh | Entities audited u/s 44AB |
3. Forms & Due Dates
- Form 61A: For most entities (due by May 31of the following FY) .
- Form 61B: For prescribed financial institutions (same due date) .
- Electronic Submission: Via the Income Tax e-filing portal with a digital signature.
4. Penalties for Non-Compliance
- Late Filing: ₹500/day (post due date), rising to ₹1,000/day if unresolved after notice .
- Incorrect Data: ₹50,000 for deliberate errors or failure to rectify defects .
- Invalid SFT: If defects aren’t fixed within 30 days, the filing is deemed invalid .
5. Key Exemptions & Rules
- Aggregation Rule: Transactions of the same nature (e.g., multiple savings accounts) are summed upto check thresholds .
- Joint Accounts: Entire value attributed to all account holders.
- No Minimum Threshold for Certain Transactions: Since 2019, the earlier ₹50,000 limit was removed for some categories .
6. Purpose & Impact
- Transparency: Helps the IT Department pre-fill ITRsand detect discrepancies .
- Anti-Evasion: Tracks unreported income via high-value transactions .
Example: If a taxpayer deposits ₹12 lakh in cash across two bank accounts, the bank must report this under SFT, triggering IT scrutiny if unmatched with declared income
