What to do when your 26AS indicate SFT transactions?

What to do when your 26AS indicates SFT transactions
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What to do when your 26AS indicate SFT transactions?

New 26AS and SFT filing requirements

CBDT in May 2020, vide notification 30/2020 notified the revised form 26AS to make it more comprehensive. In addition to including the regular information relating to tax deducted or collected at source (TDS/TCS), payment of taxes, refunds, and proceedings, the form will now also include “Information relating to some specified transactions in Statement of Financial Transactions(SFT)” with effect from 1 June 2020.

So, if you download your 26AS for FY 20-210 now and if you have done any specified financial transaction in that year, it will get reflected in “Part E” of your new 26AS.

Which transactions are to be reported in SFT and who is responsible to file it?

The government is continually trying to keep a tab on black money and high-value transactions undertaken by the taxpayer. Its en-devour to achieve this, the Income-tax Law has introduced the concept of the statement of the financial transaction. This was previously called ‘Annual Information Return (AIR)’.

A statement of the financial transaction also called a reportable account, is required to be filed by certain prescribed entities (discussed below in detail), and by filing Form 61A furnishing the details of specified financial transactions during the year. On the basis of the information provided by in statement of financial transaction, the IT Department keeps a track of the transactions carried on by the taxpayer. Hence it is important for the taxpayer to check the SFT transactions appearing in their 26AS.

As per Section 285BA of the Income Tax Act, 1961 w.e.f 01-04-2015, the following persons are specified entities who are required to furnish a reportable transaction registered/recorded/maintained by them during the financial year to the income-tax authority. Predominantly, the following transactions are covered as “Specified Financial Transactions“.

  1. Cash payments for issuance of DD or pay orders or any other bank instruments in excess of Rs 10 lacs.
  2. Cash deposits or withdrawals in excess of Rs 50 lacs.
  3. Time deposits other than renewals in excess of Rs 10 lacs.
  4. Credit card payments in excess of Rs 1 lacs.
  5. Investment in bonds and debentures in excess of Rs 10 lacs.
  6. Purchase/sale of foreign currency in excess of Rs 10 lacs.
  7. Purchase or sale of immovable property.
  8. Sale of goods or services in cash in excess of Rs 2 lacs for persons liable for tax audit u/e 44AB.
  9. Cash deposits up to certain amounts during the demonetization year i.e. from 1st April 2016 to 31st December 2016.

(Click here to read the detailed provision )

In August 2020, the news mentioned that the government is widening the scope of SFT to include transactions like hotel expenses exceeding Rs 20,000/- payments of rent in excess of Rs 40,000/- etc. However, the formal notification in this regard is still awaited.

Who is responsible to file the Specified Financial Transaction report?

The responsibility to file SFT depends and differs based on the transaction. Remember, SFT is a tool for the government to identify the transactions that can attract taxes and makes it easier for the government to check whether the taxes are paid / returns are filed by the respective tax-payers. Hence, the information is collected by various authorities. For eg:

Transaction Reporting person
Cash payments in DD or pay orders or any other instruments in excess of Rs 10 lacs Banks including co-operative banks
Time deposits in excess of Rs 10 lacs Banks including co-operative banks, Post Office, Nidhi Company, NBFCs
Purchase or sale of immovable property Inspector General, Registrar or Sub-registrar

(Click here to read the detailed provision and reporting persons in detail)

In nutshell, if you have purchased or sold an immovable property during the relevant FY, then the concerned Registrar must have reported the same by filing SFT or Form 61A and the details of the same would be appearing in your New 26AS.

What to do when your New 26AS indicates SFT transactions?

As mentioned earlier, SFT transactions incurred by you will be reported by the respective reporting entities to the IT department. In case your 26AS incorporates these transactions, you simply need to ensure that the income related to those transactions has been duly offered to tax / accounted for. Any mismatch or discrepancy between the high-value transaction viz-a-viz the tax return filed by the assessee can trigger the issuance of notices by the IT officers.

For eg. If you have done a Fixed Deposit with a bank for say Rs 15 lacs during the FY, then the same will appear in 26AS as per the reporting done by the bank. You have to ensure that you have appropriately accounted for the income from which FD is made and interest income earned from that FD while filing your tax return.

So, the SFT transactions appearing in your 26AS are correct and you are accurately filing tax returns, just go ahead and file your ITR the same as in a normal scenario.

 

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About CA Janhavi Phadnis 73 Articles
Chartered Accountant and financial consultant. She has worked with corporates for 14 years with expertise in Forex-Treasury, Accounting, and Corporate Tax. She can be contacted at info.financepost@gmail.com

50 Comments

  1. What is the procedure if the reporting person has wrongly shown SFT transaction in my PAN

  2. There is an entry provided below in Form 26AS:
    1 SFT-005 Time Deposit
    STATE BANK OF INDIA, STATE BANK BHAVAN 3RD FLOOR FRT
    DEPARTMENT MADAME CAMAE ROAD NARIMAN POINT, MUMBAI,
    MAHARASHTRA, INDIA, 400021
    – (-572553.00) O
    What does this mean? and what is the tax liability?
    Please advise

  3. There is an entry reported by SBI under STF 005 on asking for the details they sent us a list in which Term Deposits in my wife’s 1st name have also been clubbed against my PAN , is this the correct interpretation by SBI . As the same Term Deposits are also Duplicated and Reported against her STF 005 Entry .
    If such entries are to be Double reported against PAN’s then what is the benefit of STF 005 if these are not PAN specific

    • That is not a correct interpretation done by SBI. If tax is being paid on the interest income earned by your wife on that FD then you need not worry about the incorrect reflection of the entry in your 26AS as well.

  4. There is an entry provided below in Form 26AS:
    FT-004 Cash deposit (Other than Current Account) UCO BANK, 2 india exchange 10 B T M SARANI BBD BAG, KOLKATA, WEST BENGAL, INDIA, 700001 – 206200.00 O

    What does this mean? and what is the tax liability?
    Please advise

    • If the entry reflecting in Part E of SFT 004 is correct – No action is required.
      If the entry reflecting in Part E of SFT 004 is INCORRECT – Please raise a grievance ticket on the IT portal as well as write to the bank for the amendment.

  5. My daughter’s 26as from reflects Rs327556.00 as STF005.What action will be initiated by me Pl advice.

    • If the entry reflecting in Part E of SFT 005 is correct – No action required.
      If the entry reflecting in Part E of SFT 005 is INCORRECT – Please raise a grievance ticket on IT portal as well as write to bank for the amendment.

  6. There is an entry under Part-E-SFT005 Time deposit in form 26as Rs327556.What does this mean? Please advise.

    • If the entry reflecting in Part E of SFT 005 is correct – No action required.
      If the entry reflecting in Part E of SFT 005 is INCORRECT – Please raise a grievance ticket on IT portal as well as write to bank for the amendment.

    • If the entry reflecting in Part E of SFT 006 is correct – No action is required.
      If the entry reflecting in Part E of SFT 006 is INCORRECT – Please raise a grievance ticket on the IT portal as well as write to the bank for the amendment.

  7. Sir,I take personal loan (1400000 appx) from bank and deposit in my saving account for a period six months appx. And now SFT-005 Time deposit Amount (-15688) in negative what actions I can required

  8. I have an entry against SFT 005 and I cannot relate the amount to any transactions. I do have deposits that can come in SFT 005 but this is completely a different figure. The bank is not responding and keeps sending me TDS certificates instead of understanding what I ask. What should I do?

    • Please raise a grievance ticket on the IT portal as well as write to the bank for the amendment.

      They may not respond to the same, but it serves as a documented record in the case assessment proceedings are initated.

  9. I had received amount of more then 10 lacs in my account as a nominee from health insurance after my father’s death and it is shown as SFT-005 time deposit transaction in my 26AS. Will I be taxed on this amount, if yes then what percentage and if no then please confirm.

  10. There is an entry provided below in Form 26AS:
    1 SFT-005 Time Deposit
    STATE BANK OF INDIA, STATE BANK BHAVAN 3RD FLOOR FRT
    DEPARTMENT MADAME CAMAE ROAD NARIMAN POINT, MUMBAI,
    MAHARASHTRA, INDIA, 400021
    – (-1732542.00) O
    What does this mean? and what is the tax liability?
    Shall I show it in ITR-1 and where?
    Please advise

    • If the entry reflecting in Part E of SFT 005 is correct – No action is required. Make sure interest income is correctly shown in ITR.
      If the entry reflecting in Part E of SFT 005 is INCORRECT – Please raise a grievance ticket on the IT portal as well as write to the bank for the amendment.

      For any specific concerns get in touch with our team of experts on info.financepost@gmail.com

  11. Form 26AS, in part E, i found SFT-04 cash deposit in two accounts is over 10 lakhs and in remarks column its O.
    what this means. what is my steps for this

    • It means more than Rs 10 lakhs cash was deposited in your accounts.

      If it is correct no need to take any action. If it is incorrect – please write to your bank for correction and raise a grievance ticket on the IT portal for the same.

      For any specific concerns get in touch with our team of experts on info.financepost@gmail.com

  12. My query is related to SFT005-
    a. Say in one bank A my FD of Rs 11Lakhs matures and to get more
    interest I online transfer the amount 11 Lakhs to bank B and make
    fixed deposit of Rs 11Lakhs in bank B. Bank B will report it in
    SFT005. As principal amount Rs11Lakhs is non taxable, where to show
    this Rs 11Lakhs in my Income tax return One(ITR1) to make it non
    taxable.
    b. Say in bank A I got FD matured of Rs11lakhs. Aftermoney is
    received in saving account I make fixed deposit of Rs 11Lakhs in bank
    A. Bank A will report it in SFT005. As principal amount Rs11Lakhs is
    non taxable, where to show this Rs 11Lakhs in my Income tax return
    One(ITR1) to make it non taxable.

    • The principal amount of FD received upon maturity is never taxable and you need not show it anywhere while filing the income tax return. Only the interest earned on the FD would be taxed on the accrual basis.

  13. In my form 26s in Part E, Seven entries of each 2,71,533/-are entered by a MF company in which four are + positve entries and three are -negative. What is the meaning of it. Can anybody explain?.

    • Looks like an error was made by the MF company. You may write to them for correction, chances of correction by them are negligible. But this would serve as proof in case your case comes under assessment.

  14. an amount of 3132144.00 -SFT- time deposit -marked as O, shown in my 26 as, please advice me.

    • This means you have an amount of Rs.31,32,144.00 as time deposits. “Marked as O” stands for the original.

      Please make sure interest income is included while filing ITR.

  15. Hi Sir, In 26AS its mentioned in Part E SFT-06 Rs 1800000 (Its Correct I have used credit card). Is any action I have to take?. Is it any problem to do my ITR please suggest me.

  16. In 26as shown SFT 005 Time Deposit Rs.43,164/-
    What does it mean. what I have to do in ITR filing. Please send reply

      • time deposit has to be reported if more than 10L only right
        why some small amounts are reported and some re not?

        • Based on the instructions issued by the government and reading the relevant section, reporting is required only for time deposits above Rs 10 lacs in SFT. But certain banks are reporting for lower/small amounts voluntarily.

  17. I have only income of less than 5 lakhs and in my 26a/s it shows a sft-006 for using credit card for more than 10 lakhs , how do I file the it return ?? generally I was filing itr-1 previously but i am confused how to show the 10 lakh rupees transaction in ITR-1. please help

    • Based on the facts provided above. Details of the credit card are incorrectly reflecting in your 26AS. So you need to write to the bank and ask for a correction.

  18. Hi Sir, In 26AS for AY21-22 SFT-005 is Rs 12,00,000.00 with no transaction date and Remarks “O”. This is NRE Deposits opened from abroad savings. How to show this in ITR-2 form. Please suggest.

  19. time deposit has to be reported if more than 10L only right
    why some small amounts are reported and some re not?

    • Based on the instructions issued by the government and reading the relevant section, reporting is required only for time deposits above Rs 10 lacs in SFT. But certain banks are reporting for lower/small amounts voluntarily.

  20. Nobody has answered on the following.
    That I transferred maturity proceed of a fd after TDS by bank to another bank and made new FD .The new FD is shown in partE of 26AS.what action to be taken by me in itr Filing? It is not income because it is invested from maturity amount of earlier fd.Interest also shown in Form 16A and tds made by bank and deposited to govt.what to do in such a scenario?

  21. My 26AS shows SFT-005 Time deposit – STATE BANK OF INDIA, STATE BANK BHAVAN 3RD FLOOR FRT DEPARTMENT MADAME CAMAE ROAD NARIMAN POINT, MUMBAI, MAHARASHTRA, INDIA, 400021. Its of amount INR 627468.00 which is less than 10 lakhs. I did not find any transaction or FD which matches this amount. Also I do not know what I should do against this amount in my ITR1 filing ?Bank is not giving me any response. How should I write to the SBI bank of the address they have given above ? The branch is not ready to help at all.

    • If you are sure no such transaction has been made by you. You may ignore the same while furnishing your ITR. It is possible while uploading details an incorrect entry would have been made by the bank. For being on the safe side, you can write/email to the bank for the above and keep a copy for your reference.

  22. Hi, in my 26AS SFT05 of 32lakh is reported it is the the amount of house property that I purchased. Do I need to show this in my ITR or where to show?

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