CBDT issues notification specifying format, procedure and guidelines for submission of Statement of Financial Transactions (SFT) for Interest income, Dividend income, Mutual Fund Transactions by Registrar and Share Transfer Agent and Depository Transactions under Income Tax Act, 1961.
Section 285BA and Rule 114E deal with the filing of Statement of Financial Translations (SFT) in Form 61A by various persons. Section 285BA was further amended in 2019 by the Finance (No. 2) Act, 2019. The amendment was carried out in order to enable pre-filling of return of income, It was also intended to obtain information by widening the scope of furnishing of statement of financial transactions by mandating furnishing of statement by certain prescribed persons other than those who are currently furnishing the same.
Read Also:
A Guide to Section 285BA and Rule 114E on Statement of Financial Translations (SFT) in Form 61A
While presenting the Union Budget, 2021 on 1st Feb., 2021, the Finance Minister announced for pre-filling of returns in order to ease the filing of returns. The Budget proposes that details of capital gains from listed securities, dividend income and interest from banks, post office etc. will also be pre-filled in returns. Details of salary income, tax payment, TDS etc. already come pre-filled in returns.
Earlier, CBDT vide Notification No. 16/2021 dated 12.03.2021 and Income-tax (4th Amendment) Rules, 2021 amends Income Tax Rule 114E read with Section 285BA of the Income Tax Act, 1961 requiring companies, depositories, post offices and other agencies to report capital gains on transfer of listed securities or units of Mutual Funds, dividend income and interest income for the purpose of pre-filling the return of income.
The statement of financial transaction (SFT) shall be filed in Form 61A electronically on the e-filing portal of the Income Tax Department. With effect from 9th April 2018, registration, statement upload and all other facilities for Form No. 61A has been migrated from the e-filing portal to the “Reporting Portal” (https://report.insight.gov.in).
Also Read: CBDT Amends Rule 114E to Report Capital Gains, Interest and Dividend Income for Pre-filling Return
Sub-Rule (5A) of Rule 114E provides for reporting the following incomes by the specified reporting persons -
The said Notification no. 16/2021 states that the Principal Director General of Income Tax (Systems) or the Director-General of Income Tax (Systems) with the approval of the Board will specify the-
Form
Time Limit or due date
Frequency, and
Manner
in which the statement needs to be furnished by the reporting persons.
In this context, the Directorate of Income Tax (Systems) issues notifications specifying format, procedure and guidelines for submission of Statement of Financial Transactions(SFT) as specified below-
SFT for Dividend Income
The SFT Transaction Code for Dividend Income is assigned as ‘SFT-015’. This is required to be filed by a company paying dividend in respect of Dividend distributed during the financial year.
Signing of SFT: The SFT for Dividend Income shall be signed, verified and furnished by the specified Designated Director. The SFT for Dividend Income is required to be filed in Form No. 61A on the “Reporting Portal” (https://report.insight.gov.in) with login credentials (PAN and password) of the designated director.
Due Date: The SFT for Dividend Income shall be furnished on or before the 31st May, immediately following the financial year in which the transaction is registered or recorded. Therefore, the due date to file SFT for Dividend Income for FY 2020-21 is 31st May, 2021.
Who is required to furnish SFT for Dividend Income: Only a Company is required to furnish SFT for Dividend Income
Others: 1. The information is to be reported for all dividends (interim or final) distributed during the financial year.
2. One report would include details of dividend payment to one person.
3. Dividend will be the total amount of dividend distributed during the financial year.
SFT for Interest Income
The SFT Transaction Code for Interest Income is assigned as ‘SFT-016’. This is required to be filed by a company paying interest in respect of Interest paid/credited during the financial year.
Signing of SFT: The SFT for Interest Income shall be signed, verified and furnished by the specified Designated Director. The SFT for Interest Income is required to be filed in Form No. 61A on the “Reporting Portal” (https://report.insight.gov.in) with login credentials (PAN and password) of the designated director.
Due Date: The SFT for Interest Income shall be furnished on or before the 31st May, immediately following the financial year in which the transaction is registered or recorded. Therefore, the due date to file SFT for Interest Income for FY 2020-21 is 31st May, 2021.
Who is required to furnish SFT for Interest Income: The following Class of person is required to furnish SFT for Interest Income:
1. A Bank including a Co-operative Bank
2. Post Office
3. An NBFC Company
Others: 1. The information is to be reported for all account/deposit holders where cumulative interest exceeds Rs 5,000 per person in the financial year.
2. Interest which is exempt from tax under the Income-tax Act, 1961 such as interest on Public Provident Fund (PPF) Account, Foreign Currency Non-resident (FCNR) Account, Sukanya Samriddhi Account, Resident Foreign Currency Account etc. need not be reported.
3. The reporting person is required to report the interest income on ‘gross interest’ basis without considering the deduction of Rs. 10,000/ available under section 80TTA. Though not stated but it follows that deduction of Rs. 50,000 for interest income under section 80TTB shall also not be reduced.
4. In case of joint account, the interest paid/credited should be assigned to the first/primary account holder or specified assigned person as per Form 37BA.
5. Where the account holder is a minor, the information shall be reported in the name of Legal Guardian.
6. Separate report is required to be submitted for each account type (i.e. S-Savings, T-Time Deposit, R-Recurring Deposit, O-Others) and Interest on the same account type is required to be aggregated in the report.
SFT for Depository Transactions
The SFT for Depository Transactions is required to be filed to include reporting of information relating to Capital gains on transfer of listed securities or units of Mutual Funds.
Signing of SFT: A separate control statement is required to be signed, verified and furnished by the Designated Director.
Due Date: The SFT for Depository Transactions relating to Financial Year 2020-21 shall be furnished on or before the 31st May 2021.
Thereafter, the SFT for Depository Transactions shall be required to be filed quarterly within the below mentioned due date:
There is a provision to file correction statement to remove any defects in the original statement furnished.
Who is required to furnish SFT for Interest Income: All Depositories as defined in section 2(1)(e) of the Depositories Act, 1996 are required to prepare the data file in prescribed format from their internal system. Reporting entities are required to submit the data files using SFTP Server using the login credentials.
Others: 1. In case of a minor, details of legal or natural guardian (PAN, Name etc.) may be provided.
2. For Off Market debits, information need not be provided if transferor and transferee are the same person.
3. The securities should be classified into a specified security class for determining the type of asset (short term/long term) and applicable rate.
4. For every debit transaction, the corresponding credit transaction should be identified using First-in-First-Out (FIFO) method. The estimated cost of acquisition for the credit should be determined on the best possible available price with the depository. The cost of acquisition can be estimated as per the closing rate on the date (T-2) of transaction for market purchase.
5. The estimated cost of acquisition is to be taken as NIL for OFF Market purchase, IPO or Corporate Action or for any transaction through other than Exchange. The taxpayer will be able to modify the cost of acquisition before filing the return.
6. The Cost Inflation Index should be used to determine estimated indexed cost of acquisition wherever applicable.
7. Grandfathering shall be allowed where equity share in a company or a unit of an equity-oriented fund is acquired before the 1st day of February, 2018.
SFT for Mutual Fund Transactions
The SFT for Mutual Fund Transactions is required to be filed to include reporting of information relating to Capital gains on transfer of units of Mutual Funds.
Signing of SFT: A separate control statement is required to be signed, verified and furnished by the Designated Director.
Due Date: The SFT for Depository Transactions relating to Financial Year 2020-21 shall be furnished on or before the 31st May 2021.
Thereafter, the SFT for Depository Transactions shall be required to be filed quarterly within the below mentioned due date:
There is a provision to file correction statement to remove any defects in the original statement furnished.
Who is required to furnish SFT for Interest Income: All Registrar and Share Transfer Agents are required to prepare the data file in prescribed format from their internal system. Reporting entities are required to submit the data files using SFTP Server using the login credentials.
Others: 1. The Mutual Fund transaction summary file will be used for pre-filling the gain/income/loss from Mutual Fund transactions.
2. In case of a minor, details of legal or natural guardian (PAN, Name etc.) may be provided.
3. The Estimated Sale Consideration for the debit transaction should be determined on the best possible available price of the asset with the RTA. In case the sale consideration related to a sale/transfer is not available, Redemption Offer Price (Exit Load adjusted NAV) on the date of sale/transfer may be taken. The taxpayer will be able to modify the sales consideration before filing the return.
4. The securities should be classified into specified security class for determining the type of asset (short term/long term) and applicable rate.
5. For every debit transaction, the corresponding credit should be identified using First in First Out (FIFO) method. The estimated cost of acquisition for the credit should be determined on the best possible available price with the RTA. In case the cost of acquisition related to a credit/transfer is not available, NAV for the end of the day of the credit may be taken. The taxpayer will be able to modify the cost of acquisition before filing the return.
6. Grandfathering shall be allowed where units of an equity-oriented fund is acquired before the 1st day of February, 2018.
Each of the notified SFT requirements is discussed below.
Notification No. 1 of 2021 dated 20.04.2021: CBDT issues notification specifying format, procedure and guidelines for submission of Statement of Financial Transactions (SFT) for Dividend income under Income Tax Act, 1961.
DGIT(S)/ADG(S)-2/Reporting Portal/2021/180
Government of India
Ministry of Finance
Central Board of Direct Taxes
Directorate of Income Tax (Systems)
Notification No. 1 of 2021
New Delhi, 20 April, 2021
Format, Procedure and Guidelines for submission of Statement of Financial Transactions (SFT) for Dividend income
Section 285BA of the Income Tax Act, 1961 and Rule 114E requires specified reporting persons to furnish statement of financial transaction (SFT).
2. For the purposes of pre-filling the return of income, CBDT has issued Notification No. 16/2021 dated 12.03.2021 to include reporting of information relating to dividend income. The new sub rule 5A of rule 114E specifies that the information shall be furnished in such form, at such frequency, and in such manner, as may be specified by the Director General of Income Tax (Systems), with the approval of the Board.
3. The guidelines for preparation and submission of Statement of Financial Transactions (SFT) information are enclosed in Annexure A and Annexure B respectively. The data structure and validation rules are enclosed in Annexure C and Annexure D respectively. Notification No. 3 of 2018 Dated 5.04.2018 may be referred for the procedure for registration.
4. Reporting entities are required to prepare the data file in prescribed format from their internal system. An excel based report preparation utility has also been provided to assist small reporting entities in preparing data file. The data files prepared by internal system/report preparation utility should be validated using Text File Validator/Submission Utility. After validation, the text file is required to be compressed, encrypted and signed using the Text File Submission Utility before uploading on the reporting portal (https://report.insight.gov.in/). Reporting entities, having large number of data files, can also submit the data files using SFTP Server (specific request may be made for SFTP upload).
5. The statement of financial transactions shall be furnished on or before the 31 st May, immediately following the financial year in which the transaction is registered or recorded.
6. The statement of financial transaction shall be signed, verified and furnished by the specified Designated Director. Where the reporting person is a nonresident, the statement may be signed, verified and furnished by a person who holds a valid power of attorney from such Designated Director. The data files are required to be uploaded at the reporting portal through the login credentials (PAN and password) of the designated director.
7. The reporting entities are advised to provide information of dividend income, reported to Income Tax Department, to the taxpayers which will enable them to reconcile the information displayed in the Annual Information Statement (AIS) (Form 26AS).
8. In case, the reporting person/entity comes to know or discovers any inaccuracy in the information provided in the statement or the defects have been communicated to the reporting person/entity, it is required to remove the defects by submitting a correction/deletion statement.
9. The reporting person/entity is required to document and implement appropriate information security policies and procedures with clearly defined roles and responsibilities to ensure security of submitted information and related information/documents. The reporting person/entity is also required to document and implement appropriate archival and retrieval policies and procedures with clearly defined roles and responsibilities to ensure that submitted information and related information/documents are available promptly to the competent authorities.
10. This Notification shall come into effect from the date of issue.
(Anu J. Singh)
DGIT (Systems), CBDT
Annexure A
Guidelines for Preparation of Statement of Financial Transactions (SFT)
Annexure B
Guidelines for Preparation of Statement of Financial Transactions (SFT)
1. Any file which does not meet the validation requirements will be rejected.
2. After upload each upload file will be given unique Statement ID.
3. The file upload status will be as below:
• Uploaded File uploaded and pending for processing.
• Accepted File accepted after processing.
• Rejected File rejected after processing.
4. In case of any error, complete file will be rejected and the rejection reason(s) can be viewed by clicking Rejected link under status column. User need to correct the relevant error(s) and upload the file again.
5. In case Reporting Entity needs to modify uploaded data, Correction Statement is required to be filed. In the Correction Statement, only those reports should be uploaded in which correction is required. Statement ID of the original Statement which is being corrected should be selected while uploading. The Report Serial Number (RSN) along with Original Statement ID will uniquely identify the report which is being corrected. If the correction statement is successfully accepted, the reports in the earlier statement will be marked as inactive and the newly uploaded report will be active.
6. In case Reporting Entity needs to delete uploaded data, Deletion Statement is required to be filed. In the Deletion Statement, only those reports should be uploaded which are to be deleted. Statement ID of the original Statement which is being deleted should be selected while uploading. The Report Serial Number (RSN) along with Original Statement ID will uniquely identify the report which is being deleted. If the Deletion Statement is successfully accepted, the reports in the earlier statement will be marked as inactive.
Annexure C
Data Structure
The information is required to be uploaded in data file. The data file should be in ASCII format with one report per line. All fields in each file should be delimited with the delimiter “|”. The data structure is as under:
Note: The first record in the file should contain header text. There should not be any blank row(s) between reports.
Annexure D
Validation Rules
Upload Level Validations
Upload level validation would be done to ascertain that the correct file is being uploaded. The file would be rejected at the upload stage if it does not clear the upload level validations
File Level Validations
Any file which does not meet the following requirements will be rejected.
Download Copy of Notification No. 1/2021 dated 20.04.2021 specifying format, procedure and guidelines for submission of Statement of Financial Transactions (SFT) for Dividend income in pdf format
Notification No. 2 of 2021 dated 20.04.2021: CBDT issues notification specifying format, procedure and guidelines for submission of Statement of Financial Transactions (SFT) for Interest income under Income Tax Act, 1961
DGIT(S)/ADG(S)-2/Reporting Portal/2021/180
Government of India
Ministry of Finance
Central Board of Direct Taxes
Directorate of Income Tax (Systems)
Notification No. 2 of 2021
New Delhi, 20 April, 2021
Format, Procedure and Guidelines for submission of Statement of Financial Transactions (SFT) for Interest income
Section 285BA of the Income Tax Act, 1961 and Rule 114E requires specified reporting persons to furnish statement of financial transaction (SFT).
2. For the purposes of pre-filling the return of income, CBDT has issued Notification No. 16/2021 dated 12.03.2021 to include reporting of information relating to interest income. The new sub rule 5A of rule 114E specifies that the information shall be furnished in such form, at such frequency, and in such manner, as may be specified by the Director General of Income Tax (Systems), with the approval of the Board.
3. The guidelines for preparation and submission of Statement of Financial Transactions (SFT) information are enclosed in Annexure A and Annexure B respectively. The data structure and validation rules are enclosed in Annexure C and Annexure D respectively. Notification No. 3 of 2018 Dated 5.04.2018 may be referred for the procedure for registration.
4. Reporting entities are required to prepare the data file in prescribed format from their internal system. An excel based report preparation utility has also been provided to assist small reporting entities in preparing data file. The data files prepared by internal system/report preparation utility should be validated using Text File Validator/Submission Utility. After validation, the text file is required to be compressed, encrypted and signed using the Text File Submission Utility before uploading on the reporting portal (https://report.insight.gov.in/). Reporting entities, having large number of data files, can also submit the data files using SFTP Server (specific request may be made for SFTP upload).
5. The statement of financial transactions shall be furnished on or before the 31st May, immediately following the financial year in which the transaction is registered or recorded.
6. The statement of financial transaction shall be signed, verified and furnished by the specified Designated Director. Where the reporting person is a non-resident, the statement may be signed, verified and furnished by a person who holds a valid power of attorney from such Designated Director. The data files are required to be uploaded at the reporting portal through the login credentials (PAN and password) of the designated director.
7. The reporting entities are advised to provide information of interest income, reported to Income Tax Department, to the account holder (in the form of Interest Certificate either through email or portal) which will enable taxpayers to reconcile the information displayed in the Annual Information Statement (AIS) (Form 26AS).
8. In case, the reporting person/entity comes to know or discovers any inaccuracy in the information provided in the statement or the defects have been communicated to the reporting person/entity, it is required to remove the defects by submitting a correction/deletion statement.
9. The reporting person/entity is required to document and implement appropriate information security policies and procedures with clearly defined roles and responsibilities to ensure security of submitted information and related information/documents. The reporting person/entity is also required to document and implement appropriate archival and retrieval policies and procedures with clearly defined roles and responsibilities to ensure that submitted information and related information/documents are available promptly to the competent authorities.
10. This Notification shall come into effect from the date of issue.
(Anu J. Singh)
DGIT (Systems), CBDT
Annexure A
Guidelines for Preparation of Statement of Financial Transactions (SFT)
Annexure B
Guidelines for Submission of Statement of Financial Transactions (SFT)
1. Any file which does not meet the validation requirements will be rejected.
2. After upload each upload file will be given unique Statement ID.
3. The file upload status will be as below:
• Uploaded File uploaded and pending for processing.
• Accepted File accepted after processing.
• Rejected File rejected after processing.
4. In case of any error, complete file will be rejected and the rejection reason(s) can be viewed by clicking Rejected link under status column. User need to correct the relevant error(s) and upload the file again.
5. In case Reporting Entity needs to modify uploaded data, Correction Statement is required to be filed. In the Correction Statement, only those reports should be uploaded in which correction is required. Statement ID of the original Statement which is being corrected should be selected while uploading. The Report Serial Number (RSN) along with Original Statement ID will uniquely identify the report which is being corrected. If the correction statement is successfully accepted, the reports in the earlier statement will be marked as inactive and the newly uploaded report will be active.
6. In case Reporting Entity needs to delete uploaded data, Deletion Statement is required to be filed. In the Deletion Statement, only those reports should be uploaded which are to be deleted. Statement ID of the original Statement which is being deleted should be selected while uploading. The Report Serial Number (RSN) along with Original Statement ID will uniquely identify the report which is being deleted. If the Deletion Statement is successfully accepted, the reports in the earlier statement will be marked as inactive.
Annexure C
Data Structure
Annexure D
Validation Rules
Download Copy of Notification No. 2/2021 dated 20.04.2021 specifying format, procedure and guidelines for submission of Statement of Financial Transactions (SFT) for Interest income in pdf format
Notification No. 3 of 2021 dated 30.04.2021: CBDT issues notification specifying format, procedure and guidelines for submission of Statement of Financial Transactions (SFT) for Depository Transactions under Income Tax Act, 1961
DGIT(S)/ADG(S)-2/Reporting Portal/2021/180
Government of India
Ministry of Finance
Central Board of Direct Taxes
Directorate of Income Tax (Systems)
Notification No. 3 of 2021
New Delhi, 30th April, 2021
Format, Procedure and Guidelines for submission of Statement of Financial Transactions (SFT) for Depository Transactions
Section 285BA of the Income Tax Act, 1961 and Rule 114E requires specified reporting persons to furnish statement of financial transaction (SFT).
2. For the purposes of pre-filling the return of income, CBDT has issued Notification No. 16/2021 dated 12.03.2021 to include reporting of information relating to Capital gains on transfer of listed securities or units of Mutual Funds. The new sub rule 5A of rule 114E specifies that the information shall be furnished in such form, at such frequency, and in such manner, as may be specified by the Director General of Income Tax (Systems), with the approval of the Board.
3. The guidelines for preparation and submission of Statement of Financial Transactions (SFT) information are enclosed in Annexure A and Annexure B respectively. The format of control statement to be submitted by the Designated Director is given in Annexure C. The data structure and validation rules are enclosed in Annexure D and Annexure E respectively. Notification No. 3 of 2018 dated 05.04.2018 may be referred for the procedure for registration.
4. All Depositories as defined in clause (e) of sub-section (1) of section 2 of the Depositories Act, 1996(22 of 1996) are required to prepare the data file in prescribed format from their internal system. Reporting entities are required to submit the data files using SFTP Server using the login credentials (To be communicated separately).
5. A separate control statement (refer annexure C) is required to be signed, verified and furnished by the Designated Director.
6. The statement of financial transactions relating to Financial Year 2020-21 shall be furnished on or before the 31st May 2021. Thereafter, the statement of financial transactions relating to the quarter ending 30th June, 31st September, 31st December and 31st March shall be furnished on or before 25th of July, October, January and April respectively.
7. The reporting entities are also required to provide information reported to Income Tax Department, to the account holder which will enable taxpayers to reconcile the information displayed in the Annual Information Statement (AIS) (Form 26AS).
8. In case, the reporting person/entity comes to know or discovers any inaccuracy in the information provided in the statement or the defects have been communicated to the reporting person/entity, it is required to remove the defects by submitting a correction/deletion statement.
9. The reporting person/entity is required to document and implement appropriate information security policies and procedures with clearly defined roles and responsibilities to ensure security of submitted information and related information/documents. The reporting person/entity is also required to document and implement appropriate archival and retrieval policies and procedures with clearly defined roles and responsibilities to ensure that submitted information and related information/documents are available promptly to the competent authorities.
10. This issues with the approval of CBDT. This Notification shall come into effect from the date of issue.
(Sanjeev Singh)
ADG(Systems)-2,CBDT
Annexure A
Guidelines for Preparation of Statement of Financial Transactions (SFT)
The guidelines for preparation of Statement of Financial Transactions (SFT) for Depository transactions are as under:
1. The Depository transaction summary file will be used for pre-filling the gain/income/loss from securities transactions. The Depository Transaction Summary is required to be prepared for user-initiated debit transactions in the demat account. For Off Market debits, information need not be provided if transferor and transferee are same person.
2. In case of a minor, details of legal or natural guardian (PAN, Name etc.) may be provided.
3. The Estimated Sale Consideration for the debit transaction should be determined on the best possible available price of the asset with the depository (e.g. end of day price). The taxpayer will be able to modify the sales consideration before filing the return.
4. The securities should be classified into specified security class for determining the type of asset (short term/long term) and applicable rate.
5. The period of holding (difference between date of sale and date of acquisition of any share/security in the demat account) should be used to classify the asset as short term or long-term asset. First in First out (FIFO) method should be used for identification of corresponding credit in demat account and computation of period of holding. Any capital asset held by the taxpayer for a period of more than minimum period of holding will be treated as long-term capital asset and remaining assets will be classified as short-term asset. The specified minimum period of holding for different asset class is as under:
6. For every debit transaction, the corresponding credit transaction should be identified using First in First Out (FIFO) method. The estimated cost of acquisition for the credit should be determined on the best possible available price with the depository. The cost of acquisition can be estimated as per the closing rate on the date (T-2) of transaction for market purchase. The estimated cost of acquisition is to be taken as NIL for OFF Market purchase, IPO or Corporate Action or for any transaction through other than Exchange. The taxpayer will be able to modify the cost of acquisition before filing the return.
7. In relation to a long-term capital asset, being an equity share in a company or a unit of an equity-oriented fund acquired before the 1st day of February, 2018, adjusted cost of acquisition shall be higher of (i) the cost of acquisition of such asset; and (ii) lower of (A) the fair market value of such asset as on 31st January, 2018; and (B) the full value of consideration received or accruing as a result of the transfer of the capital asset. In a case where the capital asset is listed on any recognized stock exchange as on the 31st day of January, 2018, "fair market value" means the highest price of the capital asset quoted on such exchange on the said date. If there is no trading in such asset on such exchange on the 31st day of January, 2018, the highest price of such asset on such exchange on a date immediately preceding the 31st day of January, 2018 when such asset was traded on such exchange shall be the fair market value. In case the cost of acquisition of asset acquired before the 1st day of February, 2018 is not easily available, the adjusted cost of acquisition may be taken as lower of (A) the fair market value of such asset; and (B) the full value of consideration.
8. The Cost Inflation Index should be used to determine estimated indexed cost of acquisition wherever applicable.
9. The details of demat account holders and summary values for the demat account for the reporting period should be reported in Depository Account Summary (DEP_ACC_SUMM.TXT).
10. The details of off-market transactions recorded by the depository during the year should be reported in Depository Off-Market Transactions (DEP_OFF_TRN.TXT).
Annexure B
Guidelines for Submission of Statement of Financial Transactions (SFT)
1. Reporting entities are required to prepare the data file in prescribed format from their internal system. Reporting entities are required to submit the data files using SFTP Server using the login credentials (To be communicated separately). A separate control statement (refer Annexure C) is required to be signed, verified and furnished by the Designated Director.
2. Any file which does not meet the validation requirements will be rejected.
3. In case Reporting Entity needs to modify uploaded data, Correction Statement is required to be filed. In the Correction Statement, only those records should be uploaded in which correction is required. In case Reporting Entity needs to delete uploaded data, Deletion request is required to be filed.
Annexure C
Control Statement for Depository Transactions
I, declare that to the best of my knowledge and belief, the information given in the data files is correct and complete and is in accordance with the provisions of the Income-tax Act, 1961.
Name _____________________________
Designation _________________________
Annexure D
Data Structure
The information is required to be uploaded in data file. The data file should be in ASCII format with one report per line. All fields in each file should be delimited with the delimiter “|”. The first record in the file should contain header text.
D.2. Depository Account Summary (DEP_ACC_SUMM.TXT)
This file contains details of demat account holders and summary values for the demat account for the reporting period.
Note: Refer Guidelines for preparation of SFT for more details
D.3. Depository Transaction Summary (DEP_TRN_SUMM.TXT)
This file shall contain details of security level transaction summary in respect of sales/debits during the reporting period.
Note: Refer Guidelines for preparation of SFT for more details
D.4. Depository Off-Market Transaction (DEP_OFF_TRN.TXT)
This file shall contain details of off-market transactions recorded for a person/client by the depository during the year
Note: Refer Guidelines for preparation of SFT for more details
Permissible Values - Statement Type
Permissible Values - Reason for Correction
Permissible Values – Security Class Code
Permissible Values – Transaction Reason
Permissible Values - State code
Table - Capital Gain Index Chart
Annexure E
Validation Rules
The errors have been classified in following categories:
The validation rules are as under:
Download Copy of Notification No. 3/2021 dated 30.04.2021 specifying format, procedure and guidelines for submission of Statement of Financial Transactions (SFT) for Depository Transactions in pdf format
Notification No. 4 of 2021 dated 30.04.2021: CBDT issues notification specifying format, procedure and guidelines for submission of Statement of Financial Transactions (SFT) for Mutual Fund Transactions by Registrar and Share Transfer Agent under Income Tax Act, 1961.
DGIT(S)/ADG(S)-2/Reporting Portal/2021/180
Government of India
Ministry of Finance
Central Board of Direct Taxes
Directorate of Income Tax (Systems)
Notification No. 4 of 2021
New Delhi, 30th April, 2021
Format, Procedure and Guidelines for submission of Statement of Financial Transactions (SFT) for Mutual Fund Transactions by Registrar and Share Transfer Agent
Section 285BA of the Income Tax Act, 1961 and Rule 114E requires specified reporting persons to furnish statement of financial transaction (SFT).
2. For the purposes of pre-filling the return of income, CBDT has issued Notification No. 16/2021 dated 12.03.2021 to include reporting of information relating to Capital gains on transfer of units of Mutual Funds. The new sub rule 5A of rule 114E specifies that the information shall be furnished in such form, at such frequency, and in such manner, as may be specified by the Director General of Income Tax (Systems), with the approval of the Board.
3. The guidelines for preparation and submission of Statement of Financial Transactions (SFT) information are enclosed in Annexure A and Annexure B respectively. The format of control statement to be submitted by the Designated Director is given in Annexure C. The data structure and validation rules are enclosed in Annexure D and Annexure E respectively. Notification No. 3 of 2018 dated 05.04.2018 may be referred for the procedure for registration.
4. All Registrar and Share Transfer Agents are required to prepare the data file in prescribed format from their internal system. Reporting entities are required to submit the data files using SFTP Server using the login credentials (To be communicated separately).
5. A separate control statement (refer annexure C) is required to be signed, verified and furnished by the Designated Director.
6. The statement of financial transactions relating to Financial Year 2020-21 shall be furnished on or before the 31st May 2021. Thereafter, the statement of financial transactions relating to the quarter ending 30th June, 31st September, 31st December and 31st March shall be furnished on or before 25th of July, October, January and April respectively.
7. The reporting entities are also required to provide information of mutual fund transactions, reported to Income Tax Department, to the account holder which will enable taxpayers to reconcile the information displayed in the Annual Information Statement (AIS) (Form 26AS).
8. In case, the reporting person/entity comes to know or discovers any Inaccuracy in the information provided in the statement or the defects have been communicated to the reporting person/entity, it is required to remove the defects by submitting a correction/deletion statement.
9. The reporting person/entity is required to document and implement appropriate information security policies and procedures with clearly defined roles and responsibilities to ensure security of submitted information and related information/documents. The reporting person/entity is also required to document and implement appropriate archival and retrieval policies and procedures with clearly defined roles and responsibilities to ensure that submitted information and related information/documents are available promptly to the competent authorities.
10. This issues with the approval of CBDT. This Notification shall come into effect from the date of issue.
(Sanjeev Singh)
ADG(Systems)-2, CBDT
Annexure A
Guidelines for Preparation of Statement of Financial Transactions (SFT)
The guidelines for preparation of Statement of Financial Transactions (SFT) for Mutual Fund transactions are as under:
1. The Mutual Fund transaction summary file will be used for pre-filling the gain/income/loss from Mutual Fund transactions.
2. The Mutual Fund Transaction Summary is required to be prepared for user- initiated debit transactions during the reporting period. For debits through transfers, information need not be provided if transferor and transferee are same person.
3. In case of a minor, details of legal or natural guardian (PAN, Name etc.) may be provided.
4. Data with respect to exchange traded funds and exchange-based transactions, , may not be provided.
5. The Estimated Sale Consideration for the debit transaction should be determined on the best possible available price of the asset with the RTA. In case the sale consideration related to a sale/transfer is not available, Redemption Offer Price (Exit Load adjusted NAV) on the date of sale/transfer may be taken. The taxpayer will be able to modify the sales consideration before filing the return.
6. The securities should be classified into specified security class for determining the type of asset (short term/long term) and applicable rate.
7. The period of holding (difference between date of sale and date of acquisition of any security) should be used to classify the asset as short term or long-term asset. First in First out (FIFO) method should be used for identification of corresponding purchases and computation of period of holding. Any capital asset held by the taxpayer for a period of more than minimum period of holding will be treated as long-term capital asset and remaining assets will be classified as short-term asset. The specified minimum period of holding for different asset class is as under:
8. For every debit transaction, the corresponding credit should be identified using First in First Out (FIFO) method. The estimated cost of acquisition for the credit should be determined on the best possible available price with the RTA. In case the cost of acquisition related to a credit/transfer is not available, NAV for the end of the day of the credit may be taken. The taxpayer will be able to modify the cost of acquisition before filing the return.
9. In relation to a long-term capital asset, being a unit of an equity-oriented fund acquired before the 1st day of February, 2018, adjusted cost of acquisition shall be higher of (i) the cost of acquisition of such asset; and (ii) lower of (A) the fair market value of such asset as on 31st January, 2018; and (B) the full value of consideration received or accruing as a result of the transfer of the capital asset.
10. The Cost Inflation Index should be used to determine estimated indexed cost of acquisition wherever applicable.
11. The details of clients and summary values for the transactions for the reporting period should be reported in MF Account Summary (MF_ACC_SUMM.TXT)
12. The details of transactions effected through transmission and recorded by the RTA during the year along with off-market transactions recorded in the RTA system should be reported in Mutual Funds Off-Market Transactions (MF_OFF_TRN.TXT)
Annexure B
Guidelines for Submission of Statement of Financial Transactions (SFT)
1. Reporting entities are required to prepare the data file in prescribed format from their internal system. Reporting entities are required to submit the data files using SFTP Server using the login credentials (to be communicated separately). A separate control statement (refer Annexure C) is required to be signed, verified and furnished by the Designated Director.
2. Any file which does not meet the validation requirements will be rejected.
3. In case Reporting Entity needs to modify uploaded data, Correction Statement is required to be filed. In the Correction Statement, only those records should be uploaded in which correction is required. In case Reporting Entity needs to delete uploaded data, Deletion request is required to be filed.
Annexure C
Control Statement for Mutual Fund Transactions (RTA)
I, declare that to the best of my knowledge and belief, the information given in the data files is correct and complete and is in accordance with the provisions of the Income-tax Act, 1961.
Name __________________
Designation_______________
Annexure D
Data Structure
The information is required to be uploaded in data file. The data file should be in ASCII format with one report per line. All fields in each file should be delimited with the delimiter “|”. The first record in the file should contain header text.
D.1. Mutual Fund Batch File (MF_BATCH.TXT)
This file contains details of reporting entity, principal officer and files uploaded by the reporting entity
D.2. Mutual Fund Account Summary (MF_ACC_SUMM.TXT)
This file contains details of a person and summary values of the financial transactions for the reporting period.
Note: Refer Guidelines for preparation of SFT for more details
D.3. Mutual Fund Transaction Summary (MF_TRN_SUMM.TXT)
This file shall contain details of security level transaction summary in respect of sales/debits during the reporting period.
Note: Refer Guidelines for preparation of SFT for more details
D.4. Mutual Funds Off-Market Transaction (MF_OFF_TRN.TXT)
This file shall contain details of Mutual Fund off-market transactions recorded for a person/client during the year.
Note: Refer Guidelines for preparation of SFT for more details
Permissible Values - Statement Type
Permissible Values - Reason for Correction
Permissible Values – Security Class Code
Permissible Values – Transaction Reason
Permissible Values - State code
Table - Capital Gain Index Chart
Annexure E
Validation Rules
The errors have been classified in following categories:
The validation rules are as under:
Download Copy of Notification No. 4/2021 dated 30.04.2021 specifying format, procedure and guidelines for submission of Statement of Financial Transactions (SFT) for Mutual Fund Transactions by Registrar and Share Transfer Agent in pdf format
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