Form 61A of Income Tax

Form 61A is a statement of “Specified Financial Transactions”, also known as SFTs, that taxpayers need to submit to the government for a specified financial year. The form is usually generated as per Section 285BA of the Income Tax Act, which was known as the Annual Information Return or AIR.

As per Rule 114E of Income Tax Rules 1962, Form 61A should state the details of the nature and value of transactions. Moreover, taxpayers must submit Form 61A by 31st May of every year immediately after the completion of the financial year in which it contains data.

The form and the procedure facilitate maintaining accurate data on tax filings and potential refund claims when/if applicable.

Form 61A of the Income Tax Act is divided into various parts., Part A contains statement-level information, and there are other parts, namely (Part-B/C/D). Part B is person-based reporting, Part C is account-based reporting and Part D is immovable property-based reporting.

The most important components of Form 61A include:

• Full Name

• Address

• Folio Number

• PAN

• Financial Year/ Year of Transaction

• Transaction Details

• Number and Value of Specified Financial Transactions

Form 61A is quite useful for the Income Tax Department, as it records all the Specified Financial Transactions which are conducted within a particular financial year. It helps the Income Tax Department in determining high-value transactions and prevents tax evasion by some individuals.

Moreover, it is useful for individuals and organisations to monitor their high-value specified financial transactions for documentation purposes.

The specified financial transactions include work contracts, any investment made or expenses incurred, accepting deposits or taking any loan and sale/purchase/exchange of property, goods, rights or interest in any property.

Here is the list of individuals/organisations that need to file Form 61A of the Income Tax Act compulsorily:

• Financial institutions, including banking companies and co-operative banks.

• Credit card issuing entities.

• A Non-Banking Financial Company (NBFC).

• Post Service Offices.

• An individual or entity that is subject to an audit under Section 44AB of the Income Tax Act.

• Bond and Debenture issuing corporation.

• A Nidhi company, as defined in 406 of the Companies Act 2013.

• Shares issuing corporation.

• A corporation that is listed as a recognised stock exchange.

• A mutual fund company.

• Money changers, off-shore banking units, authorised dealers and any other individuals who are defined in FEMA (Foreign Exchange Management Act).

• Sub-registrar and Inspector-Generals appointed under the Registration Act 1908.

Here is the list of transactions that are reported under SFT Form 61A.

If any individual is found to be involved in neglecting to fill out SFT Form 61A, then authorities will issue them a notice stating that they should submit Form 61A within 30 days from the notice issuance date.

However, if the person still fails to submit the form, then they will be charged ₹500 penalty per pay for non-compliance with the notice. The penalty will start from the date when the date mentioned in the notice expires.

Step-1: Go to the official E-filing website.

Step-2: Now log into the website using your User ID, PAN and Password.

Step-3: Navigate to the e-file section and upload your Form 61A on the Income Tax Reporting Portal.

Step-4: After you have uploaded Form 61A, then the details of your form name, reporting entity, reporting entity category and PAN will be displayed on the screen.

Step-5: Now, attach Form 61A with digital signature in ZIP format.

Step-6: Click on “Upload”. Once your validation process is complete, a notification will be sent confirming the upload status.

After uploading your Form 61A, please check its status. Here are the steps to view it:

Step-1: Visit the official website of Income Tax Department E-filing.

Step-2: Log into your account using your Password, PAN and User ID details.

Step-3: Now click on the “My Account” tab and select the “View Form 61A” option.

Step-4: Choose the “Filing Status and Assessment Year” you want details of and then click on “View Details”.

Step-5: Check the “Filing Status” field. It will display your Form 61A status as “Accepted”, “Rejected” or “Uploaded”.

The due date for filing the SFT Form 61A is 31st May of the following year for the previous financial year in which the transaction was made. Failure to fill out the form within the due date can result in a penalty of ₹500 per day under Section 271FA.

Suppose an individual or reporting entity identifies any mistakes in the data provided in Form 61A of the Income Tax Act. In that case, it is their responsibility to inform the Income Tax authority within ten days so that the mistakes can be rectified without incurring any penalty.

However, when income tax authorities find any defect or incomplete detail in the data provided within Form 61A, they inform the individual or reporting entity. The individual or reporting entity has 30 days from the date of the notification to rectify the mistake.

Failure to submit the rectified Form 61A within the stipulated period can result in these penalties, as per the Income Tax Act:

• ₹50,000 fine on the individual or reporting entity for providing incorrect information intentionally.

• ₹50,000 penalties for the individual and reporting entity who identify the data inaccuracies after submitting the form but still do not rectify them within the 10-day window.

• ₹500 per-day fine is imposed on the individual or reporting entity if incorrect information is furnished. The penalty starts from the original due date until specified for default in the notice. The penalty amount will be increased to ₹1,000 if the due date mentioned in the notice is not met.

Corruption and accumulation of undisclosed income are major problems in the Indian economy. To counter this issue, the Income Tax Department has made it mandatory to comply with the rule of providing data on specified financial transactions within Form 61A.

With the information provided here, you can now understand how to file Form 61A and can follow the necessary steps to avoid unnecessary penalties.

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