# Uncovering Statement of Financial Transactions (SFT)

Published: 24 May 2024  |  Last updated: 07 Aug 2025
Author: Treelife
Practice area: Finance
Source: https://treelife.in/finance/uncovering-statement-of-financial-transactions-sft/

## 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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This is informational content from Treelife. For advice specific to your situation, contact support@treelife.in