The Income Tax Department has launched a nationwide crackdown to identify and penalise non-compliant reporting entities that have failed to report high-value transaction by not filing the Statement of Financial Transactions (SFT) and Significant Financial Transactions (SRA) forms for the financial years 2023-24 and 2024-25.
The Directorate of Systems had identified a large number of such reporting entities who were either not filing reports or sending incomplete reports, a list of which was shared with the field formations by September 30, said officials.
The department has started sending notices to and slapping penalties on these entities, and asked the field formations to complete the process by the end of November. "The (Directorate of) Systems has detected non-compliance by many reporting agencies in the previous two financial years and we are in the process of sending notices," said a senior official, who did not wish to be identified. "The department has recommended hefty penalty applicable under the law and the process has to be completed by the end of November." The transactions which were not reported included cash deposits, vehicle purchases in the name of minor children, gold purchase and luxury hotel stay where the bill paid was higher than ₹50,000.
SFT provides a reporting mechanism wherein specified entities are required to provide information about high-value financial transactions including cash and digital transactions, interest and dividends.
Besides, a high-value transaction such as the purchase of a car or property or cash deposit by a person without a permanent account number has to be reported by the companies and banks to the income tax authorities.
Form 61B is used under the Income Tax Act, which is a "statement of reportable account" and must be filed by specified Indian financial institutions. The form is primarily used for reporting accounts held by foreign residents and is part of India's compliance with international tax agreements such as the Foreign Account Tax Compliance Act and the Common Reporting Standard.
This helps the department keep track of high-value transactions and curb tax evasion.
The Directorate of Systems had identified a large number of such reporting entities who were either not filing reports or sending incomplete reports, a list of which was shared with the field formations by September 30, said officials.
The department has started sending notices to and slapping penalties on these entities, and asked the field formations to complete the process by the end of November. "The (Directorate of) Systems has detected non-compliance by many reporting agencies in the previous two financial years and we are in the process of sending notices," said a senior official, who did not wish to be identified. "The department has recommended hefty penalty applicable under the law and the process has to be completed by the end of November." The transactions which were not reported included cash deposits, vehicle purchases in the name of minor children, gold purchase and luxury hotel stay where the bill paid was higher than ₹50,000.
SFT provides a reporting mechanism wherein specified entities are required to provide information about high-value financial transactions including cash and digital transactions, interest and dividends.
Besides, a high-value transaction such as the purchase of a car or property or cash deposit by a person without a permanent account number has to be reported by the companies and banks to the income tax authorities.
Form 61B is used under the Income Tax Act, which is a "statement of reportable account" and must be filed by specified Indian financial institutions. The form is primarily used for reporting accounts held by foreign residents and is part of India's compliance with international tax agreements such as the Foreign Account Tax Compliance Act and the Common Reporting Standard.
This helps the department keep track of high-value transactions and curb tax evasion.
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