In the past few times, you might be heard the word of filing of form 61A. So what is Form 61A? In this article, we will understand everything about the filing of Income-tax form 61A and form 61A applicability. Recently to keep an eye on the high-value transactions done by the taxpayers, the Income Tax Act has introduced a new concept in which the taxpayer would be required to file a Statement of Financial Transactions in a specified form 61A also called as AIR (Annual Information Return) earlier. In other words, the Statement of Financial Transactions or Form 61A is the record of specified financial transactions that would be furnished under the Income Tax Act by the assessee. In this article, we will answer the following questions relating to the statement of specified financial transactions.
- What type of transactions shall be called the Specified Financial Transactions?
- What is the filing due date of Form 61A
- Which Transactions are required to be reported in Form 61A
- In case, there is no specified financial transaction occurred in the financial year than whether the assessee is also required to file Nil Statement
- What is the penalty for Non-Compliance
- How to file form 61A
In this article, we will discuss about...
Q.1 What type of transactions shall be called the Specified Financial Transactions?
The following financial transactions are covered in the specified financial transactions:
- Purchase, sale or exchange of goods, right, property, or interest in any property.
- Works contract.
- Delivering services.
- Any investment or expenditure.
- Accepting any deposit or taking any loan.
It is to be noted that the CBDT can recommend different values for different persons with respect to different transactions by considering the nature of the transactions. For covering the specified transaction, the aggregate value of such transactions in a particular financial year must be more than Rs.50,000.
Q.2 What is the filing due date of Form 61A
This statement in form 61A for the previous FY (financial year) is required to be filed within 31st, May every year. If in case, an assessee is not able to do so, the income tax authorities shall issue a notice to such assessee and order the assessee to submit the form within the period of 30 days from the issuance of such notice. Further, in case such assessee still continues to be the assessee in default by not complying with the notice of the authorities by answering to such notice then a penalty shall be levied on such assessee which would amount to Rs.500 per day of such default. This said penalty would be calculated from the expiry of the period as mentioned in such notice.
You can download the form 61A utility from the official website of Income-tax.
Q.3 Which Transactions are required to be reported in Form 61A
This is the most crucial part of this article. In the following, we have explained the type of transactions and their limit which is required to be reported in form 61A by the specified assessee.
| Those individuals who are responsible for furnishing Form 61A | Type of Transaction and their limit |
| Banking Companies and Co-operative Banks | Cash payment for the purchase of POs (Purchase orders) / DDs (Demand drafts) for an amount equal to Rs.10 lakhs or more annually |
| Banking Companies and Co-operative Banks | Cash payment more than Rs.10 lakhs for purchasing any prepaid RBI instruments like RBI bonds, etc. |
| Banking Companies and Co-operative Banks | Deposits or withdrawals amounting to Rs.50 lakhs or more of an account holder from a current account |
| Banking Companies, Co-operative Banks and Post Offices | Deposit totalling to Rs.10 lakhs or more in one or more accounts of an account holder |
| Banking Company, Co-operative Bank, Post Master General of Post office, Nidhi | Cash payment aggregating to Rs.1 lakh or more in a year or Rs.10 lakhs or more against any credit card bill which is issued to a customer in a year |
| A company or an institution issuing debentures or bonds | Receipt exceeding Rs.10 lakhs in a year from any individual for purchasing or subscribing such debentures/bonds |
| A company issuing shares | Receipt exceeding Rs.10 lakhs in a year from an individual for purchasing or subscribing such shares. This also includes share application money received. |
| Listed companies | Share buy-back from a person for an amount totalling Rs.10 lakhs or more |
| Manager/Trustee of a Mutual Fund | Receipt exceeding Rs.10 lakhs in a year from an individual acquiring the units of such Mutual Fund |
| A Dealer of Foreign Exchange | Receipt the money from the person for the sale of a foreign currency or expenses like bank charges incurred in such foreign currency through a debit/credit card or via the issue of draft or traveller’s cheque or any other financial instrument for an amount Rs.10 lacs or more annually |
| Inspector-General/Sub-Registrar appointed under the Registration Act, 1908 | Sale/ Purchase by a person of immovable property for Rs.30 lakhs or more or which is valued by stamp valuation authority at Rs.30 lakhs or more |
| Persons Who are liable for audit u/s 44AB of the Income Tax Act | Cash receipt exceeding Rs.2 lakhs by a person for sale of goods or rendering of services (other the ones specified above) |
Q.4 In case, there is no specified financial transaction occurred in the financial year than whether the assessee is also required to file Nil Statement
There’s a most common dilemma with respect to filing of form 61A which provides that if an entity which hasn’t entered into any of Specified financial transactions in the FY (Financial Year) 2017-18 but covered into the reporting class of person as provided under the provisions of the Income Tax Act then whether they also need to file form 61A/Statement of financial transactions as Nil statement.
In this regard, we have few circulars which are being issued by the CDBT (Central Board of Direct Taxation) on the same which somewhat they could not solve such problem, however, experts in the field as an advisor, I’ll recommend that although Nil Statement is not mandatory but to stay on the safer side you should consider filing the STF (Statement of Financial Transactions) or Form 61A.
Q.5 What is the penalty for Non-Compliance
Where a person could not file the form 61A within the time then a penalty of Rs.1000 shall be levied for each day during which the default continues.
Also, if the assessee has filed the incorrect particulars in the statement, then he shall be liable for the penalty.
Q.6 How to file form 61A
For filing of form 61A, PAN number is not enough, you will also need to have ITDREIN (Income tax department reporting entity identification number). You can obtain this number by making a registration at the income tax website after login. The process is quite simple:
- After login to your account, go to “My Account”
- Click on the “Reporting Portal”
- Enter the details shown on such page
- Press submit and after submission, ITDREIN shall get generated and you receive a confirmation at your email ID and Mobile Number.
Note: once the number has been generated, there is no option for the deactivation of this number.
On the reporting portal, you will also get the form 61A where you can fill all the transactions as specified above. Fill the information, make a digital signature and then upload it.
I hope this article fulfil its purpose. Also, if you have still any doubt in this regard then you can mail us or WhatsApp us. We will be happy to assist you.