Income Tax--Specified Financial Transactions

Reporting of Specified Financial Transactions

V.K. Subramani

Tracing financial transactions is one of the effective methods to check and ensure that the parties doing such transactions are accounting the same and they do not relate to parallel economy. The lawmakers found it easier to cast the responsibility on the parties receiving the amounts or carrying out such transactions and with the advent of automation in every sphere of commercial activity, it is possible to comply with the rigourous reporting requirements impeccably within the prescribed timelines.

Section 285BA lists out persons who are responsible for registering or maintaining books of account or other document containing a record of specified financial transaction (SFT) or any reportable account, to furnish a statement to the income-tax authority or such other authority as may be prescribed. The CBDT is entrusted with the authority of prescribing different values for different transactions having regard to the nature of each such reportable transaction. The 'due date' for filing the same is 31st May immediately following the financial year in which the transaction is registered or recorded.