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Uncovering Statement of Financial Transactions (SFT)

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Treelife

Published on

May 24,
2024

Last updated on

August 7, 2025
18:01

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AI Summary

Statement of Financial Transaction (SFT) is a reporting mechanism under Section 285BA of the Income Tax Act, 1961, that requires specified entities to report high-value financial transactions to the Income Tax Department.
SFT is filed in Form 61A as prescribed under Rule 114E of the Income Tax Rules, 1962.
Entities required to file SFT include banks, NBFCs, mutual fund companies, registrars or sub-registrars of property, post offices, and credit card issuers, among other specified persons.
Reportable transactions include cash deposits or withdrawals aggregating ₹10 lakh or more in a savings account, credit card payments of ₹1 lakh or more in cash, and immovable property transactions valued at ₹30 lakh or more in a financial year.
The due date for filing SFT is 31 May of the financial year immediately following the financial year in which the transaction is recorded.
Failure to file SFT within the due date attracts a penalty of ₹500 per day of default under Section 271FA, rising to ₹1,000 per day if the default continues after a notice is issued.
Furnishing inaccurate information in an SFT can also attract penal consequences under Section 271FAA unless the error is due to a bona fide mistake that is rectified.
SFT data feeds into the Annual Information Statement (AIS) and Form 26AS, so unreported or mismatched high-value transactions can trigger income tax scrutiny or notices to the taxpayer.
Timely and accurate SFT filing helps reporting entities avoid penalties and supports taxpayers in ensuring their AIS and pre-filled income tax return data remain accurate and consistent.

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SFT is a critical tool for tax compliance, designed to monitor and report high-value financial transactions within the Indian financial system.

Here’s what you will learn in our detailed guide:
1. Introduction to SFTs and their role in the financial system
2. Entities required to file SFTs
3. Key filing requirements
4. Consequences of non-compliance
5. Advantages of timely filing

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About the Author

Treelife

Treelife Team | support@treelife.in

We are a legal and finance firm with a deep focus on the startup ecosystem. We offer a wide range of services, including Virtual CFO, Legal Support, Tax & Regulatory, and Global Expansion assistance.

Our goal at Treelife is to provide you with peace of mind and ease in business.

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Jitesh Agarwal

Founder

Leads VCFO, finance, tax, and regulatory functions at Treelife. Advises on GIFT City structuring and strategic financial decisions for startups and scale-ups.