- For eg: If Mr. Z has two current accounts and deposited amount of INR 10 lakh each, in order to check monetary threshold of INR 20 lakh, amount in both savings account need to be aggregated
- For eg: If Mr. Y has purchased shares for a value of INR 15 lakhs in October in a FY also INR 7 lakhs in November of the same FY, value of both shares need to be aggregated to check monetary threshold of INR 22 lakhs
- For eg: In case Mr. Y and Mr. Z holds two joint savings account of INR 8 lakhs and INR 12 lakhs, aggregation of INR 20 lakhs is attributed to both Mr. A and Mr. B separately to check for monetary threshold
Forms to be used for furnishing SFT
The statement of financial transaction shall be furnished electronically (under digital signature) in Form 61A to the Director of Income-tax (Intelligence and Criminal Investigation) or the Joint Director of Income-tax (Intelligence and Criminal Investigation).
However, Post Master General or a Registrar or an Inspector General may furnish Form 61A in a computer readable media being a Compact Disc or Digital Video Disc (DVD), along with the verification in Form-V on paper.
What is the Procedure to Submit SFT?
SFT shall be submitted through following procedure:
- Generate New ITDREIN Log in on e-filing portal and go to My Account> Manage ITDREIN (Income Tax Department Reporting Entity Identification Number)
Select form type and Reporting entity category and click on ‘Generate ITDREIN’
Based on this selection, appropriate ITDREIN will be generated and confirmation email and SMS will be sent to registered email id and mobile number respectively
ITDREIN generated will now appear under My Account>Manage ITDREIN - Prepare Form Go to e-file>Upload Form ‘xxx’ (appropriate Form No appears based on the selection made during registration)
Verify/enter PAN, Form Name, FY, Reporting entity category, Half year, upload type i.e., whether original/correction form /Nil statement - Upload the file On successful validation of above details, upload the file along with digital signature certificate
Success message will be displayed on the screen on successful uploading and confirmation email and SMS will be sent to registered email id and mobile number respectively
Uploaded file may be either ‘accepted’ or ‘rejected’. In case of rejection, reason for rejection would be mentioned and correction form shall be submitted through above procedure
Due date of furnishing SFT
The statement shall be furnished on or before 31 st May immediately following the financial year in which the transaction is registered or recorded.
Information under SI No. 12 and 13 in the Table being related to demonetization period, the due date was 31 January 2017
Information under SI No. 12 and 13 in the Table being related to demonetization period, the due date was 31 January 2017
Inaccurate or defective statement of financial transaction
If any person, after filing the statement, comes to know or discovers any inaccuracy in the information provided in the statement, he shall inform such inaccuracy to the prescribed income-tax authority within a period of ten days and furnish the correct information.
On the other hand, the prescribed income-tax authority may also intimate the defect to the person and give him an opportunity of rectifying the defect within a period of thirty days from the date of such intimation or within such extended period as may be allowed by prescribed income-tax authority.
Consequences of failure to comply with Section 285BA and related Rules
Non-furnishing of statement of financial transaction or reportable account will attract penalty under section 271FA. Penalty can be levied of Rs. 500 per day of default
In case of non-furnishing of SFT within due date, the prescribed income-tax authority may serve notice upon such person requiring him to furnish SFT within a period not exceeding 30 days from the date of service of such notice and he shall furnish the statement within the time specified in the notice.
If person fails to file the statement within the specified time, then a penalty of INR 1,000 per day will be levied from the day immediately following the day on which the time specified in such notice for furnishing the statement expires.
FAQs
What is the remedy available if inaccurate information is submitted in the SFT?If any person, after filing the statement, comes to know or discovers any inaccuracy in the information provided in the statement, he shall inform such inaccuracy to the prescribed income-tax authority within a period of ten days and furnish the correct information.
What if SFT is not rectified within the due date as mentioned in the intimation sent by concerned income-tax authority for defects in SFT?
If defect is not rectified within such period, such statement shall be treated as invalid and consequences of non-furnishing of SFT shall apply
Is it mandatory to file nil return also?Nil Statement is not mandatory but to stay on the safer side an assessee should consider filing the SFT (Statement of Financial Transactions).
Got Questions? Ask Away!
TanyaChopra says: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!
Yesha says:
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. Learn by Quicko – 2 Apr 21
Section 234C : Advance Tax Penalty - Delay in Payment - Learn by Quicko
Advance tax is to be paid on an installment basis. Failing to pay Advance Tax shall attract penalty under Section 234C. Read more about it. Estimated reading time: 4 minutes
Hope this helps!
HarshitShah says: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?
Yesha says:
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. Learn by Quicko – 15 Jul 21
Section 194 : TDS on Dividend from Equity Shares - Learn by Quicko
In Budget 2020, DDT is abolished and thus dividend income is taxable. TDS under section 194 has to be deducted on payment of dividend from Equity Shares. Estimated reading time: 4 minutes
Learn by Quicko – 21 Jun 21
Section 194K : TDS on Dividend from Mutual Funds - Learn by Quicko
In Budget 2020, DDT is abolished and thus dividend income is taxable. TDS under section 194K has to be deducted on payment of dividend from Mutual Funds. Estimated reading time: 4 minutes
Hope this helps! Yesha says:
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: Learn by Quicko – 11 May 21
Tax on Dividend Income & its Treatment - Learn by Quicko
On the abolishment of DDT in Budget 2020, shareholder needs to pay tax on dividend income on from equity shares & equity mutual funds. Estimated reading time: 5 minutes
Nireka says:
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 Learn by Quicko – 11 Oct 21
Set Off and Carry Forward Losses under Income Tax - Learn by Quicko
Read Income Tax Rules and tabular summary to set off losses against taxable income and carry forward remaining loss against incomes in future years Estimated reading time: 9 minutes
Learn by Quicko – 9 Aug 21
Expenses a Trader Can Claim in ITR - Learn by Quicko
Here is a list of expenses a trader can claim against income from trading to reduce the taxable income. It includes STT, CTT, rent, etc. Estimated reading time: 6 minutes
Divya_Singhvi says:
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. Learn by Quicko – 11 May 21
Tax on Dividend Income & its Treatment - Learn by Quicko
On the abolishment of DDT in Budget 2020, shareholder needs to pay tax on dividend income on from equity shares & equity mutual funds. Estimated reading time: 5 minutes
Hope this helps
Divya_Singhvi says: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…
