Widening the scope of Statement of Financial Transactions (SFT)

Existing provisions of section 285BA of the Act, inter alia, provide for furnishing of statement of financial transaction (SFT) or reportable account by person specified therein.

In order to enable pre-filling of return of income, it is proposed to obtain information by widening the scope of furnishing of statement of financial transactions by mandating furnishing of statement by certain prescribed persons other than those who are currently furnishing the same. It is also proposed to remove the current threshold of rupees fifty thousand on agragate value of transactions during a financial year, for furnishing of information, with a view to ensure pre-filling of information relating to small amount of transactions as well. In order to ensure proper compliance, it is also proposed to amend the provisions of sub-section (4) of aforesaid section so as provide that if the defect in the statement is not rectified within the time specified therein, the provisions of the Act shall apply as if such person had furnished inaccurate information in the statement.

Consequently, it is also proposed to amend the penalty provisions contained in section 271FAA so as to ensure correct furnishing of information in the SFT and widen the scope of penalty to cover all the reporting entities under section 285BA .

These amendments will take effect from 1st day of September, 2019.

[Clauses  63 & 66]

 

 

 

Statement of Financial Transactions reporting: expanded mandatory reporting, threshold removed and penalties broadened to enhance tax pre-filling. Mandatory reporting under the Statement of Financial Transactions is widened to require additional prescribed persons to furnish SFTs, the existing aggregate transaction threshold for reporting is removed to include small-value transactions, defects unrectified within the prescribed time will be treated as furnishing inaccurate information, and penalty provisions are expanded to cover all reporting entities; these amendments take effect from 1st September, 2019.