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Rule 114E – Statement of Financial Transactions | Company Vakil

For the registration with the Income Tax Department, the Government has initiated an online facility for the Reporting entities for the submission of the financial transactions statement. Individuals considered as the reporting entities are necessitated to file Form 61A or Financial transactions statement on the Income Tax Department according to the Rule 114E.

This article furnishes detailed information related to statement of financial transactions.

Statement of Financial Transactions

Most transactions reported on the portal are related to the banking company. Main transactions reported on the portal and individual in a need for tax audit are as follows:

  • Receipt for obtaining issued bonds and debentures with an aggregate amount of Rs.10 lakh or more in a financial year. Amount received on the renewal of bond or debenture issued by the company is not considered.
  • Receipt amounting Rs.10 lakh and more for obtaining shares that are issued by the company including money on share application.
  • Cash payment receipt for sale of goods and services by an individual amounting more than Rs.2 lakh.
  • Re-buying shares amounting or having a value of Rs.10 lakh or more in a financial year. Shares bought in an open market are not considered.
  • Payment in cash for purchasing bank drafts or orders payment or cheques of banker amounting Rs.10 lakh or more in a financial year.
  • Payment in cash in a financial year of amount aggregating Rs.10 lakh of more for purchasing pre-paid instruments issued by RBI.
  • Deposit or withdrawal of cash in one or more current account of an individual aggregating Rs.50 lakh or more in a financial year.
A co-operative bank or banking company under the Banking Regulation Act, 1949 .
Deposit of cash in a financial year amounting Rs.10 lakh or more in one or more accounts.
  • A cooperative bank or banking company under the Bank Regulation Act, 1949.
  • Post-Master General specified in Clause(j) of Section 2, Indian Post Office Act, 1898.
One or more time deposits aggregating Rs.10 lakh or more in a financial year.
  • A cooperative bank or banking company under the Bank Regulation Act, 1949.
  • Post-Master General specified in Clause(j) of Section 2, Indian Post Office Act, 1898.
  • Nidhi specified in the Companies Act, 2013, Section 406.
  • Non-banking financial company holding a registration certificate under the RBI Act, Section 45-IA for holding and accepting public deposit.
Payments amounting

  1. Rs.1 lakh or more in cash
  2. Rs.10 lakh or more by other mode against bills raised in one or more issued credit cards in a financial year.
  • A cooperative bank or banking company under the Bank Regulation Act, 1949 or any other company issuing credit card.
Receipt of amount aggregating to Rs.10 lakh or more in a financial year for obtaining bonds and debentures issued by company or institution. A company/institution issuing bonds/debentures.
Receipt of amount aggregating to Rs.10 lakh or more in a financial year for obtaining shares issued by company or institution. A company issuing shares.
Buy back of shares amounting Rs.10 lakh or more in a financial year from any person. A company stated on a recognized stock exchange under the Companies Act, 2013, Section 68, purchasing its own securities.
Receipt of amount aggregating to Rs.10 lakh or more in a financial year for obtaining units of one or more schemes of Mutual fund. A Mutual fund trustee or any person authorized by a trustee on behalf, managing affairs of the Mutual Fund.
Receipt for Foreign currency sale with an amount aggregating to ten lakh rupees or more in a financial year. Authorized person started in the Clause (c) of Foreign Exchange Management Act, 1999, Section 2.
Sale and purchase of immovable property amounting Rs.30 lakh or more and valued by stamp valuation authority. Inspector-General under Registration Act, 1908, Section 3.

Sub-registrar under Section 6 of this act.

Statement of Financial Transactions (SFT) – Guidelines

Reporting entities need to submit the statement of financial transactions under Section 285BA, sub-section(1) of the Income Tax Rules, Rule 114E.

Separate Form 61A has to be furnished by the reporting entity for each type of transaction. Different transactions under Statement of financial transactions are as follows:

  • SFT-001: Bank drafts purchase or payment of orders in cash.
  • SFT-002: Pre-paid instruments purchase in cash.
  • SFT-003: Deposit of cash in the current account.
  • SFT-004: Deposit of cash in other account.
  • SFT-005: Time Deposit
  • SFT-006: Credit card payment
  • SFT-007: Debentures purchase
  • SFT-008: Shares purchase
  • SFT-009: Re-buying of Shares
  • SFT-010: Mutual fund units purchase
  • SFT-011: Foreign currency purchase
  • SFT-012: Immovable property purchase and sale
  • SFT-013: Goods and services payment in cash
  • SFT-014: Deposit of cash in a specified period.

Identification for reporting transactions

  1. Identify the reportable transactions under Rule 114E for preparing the Statement of financial transaction.
  2. The details of the reportable transactions by the reporting entity has to be submitted further.

For more details and related articles, visit Company Vakil.

 

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