Is Filing a Nil Statement of Financial Transaction (SFT) Mandatory:

Is Filing a Nil Statement of Financial Transaction (SFT) Mandatory SFT or Statement of Financial Transaction: Section 285BA of the Income Tax Act requires specified reporting persons to furnish a Statement of Financial Transaction. Rule 114E of the Income Tax Rules, 1962 specifies that the statement of financial transaction required to be furnished under sub-section (1) of Section 285BA of the Act shall be submitted in Form 61A.

What are Specified Financial Transactions?

The specified financial transactions include:

• Sale, purchase, or exchange of goods, property, or rights in property.
• Works contracts.
• Provision of services.
• Investments made or expenditures incurred.
• Acceptance of any deposit or loan.

CBDT has the authority to prescribe different values for different transactions and for different categories of reporting persons based on the nature of the transactions.

Due Date for Furnishing Statement of Financial Transaction

The Statement of Financial Transactions (Form 61A) should be furnished on or before 31st May following the end of the financial year in which the transaction occurred. Section 285BA(5) also empowers tax authorities to issue a notice requiring the defaulting person to furnish the statement within 30 days from the date of service of such notice. If the person still fails to furnish the statement, a penalty of Rs. 1,000 per day will be levied after the expiry of the notice period.

Who is Required to Furnish Form 61A?

The following persons/entities are required to furnish the statement:

• Banking Companies and Co-operative Banks
• Non-Banking Financial Companies (NBFCs)
• Post Offices
• Companies issuing credit cards
• Persons covered under Section 44AB (audit cases)
• Nidhi Companies under Section 406 of the Companies Act, 2013
• Companies issuing shares or debentures
• Mutual Funds and Their Trustees
• Listed companies carrying out share buybacks
• Foreign Exchange dealers
• Sub-Registrars under Registration Act, 1908
• Authorised Dealers, Offshore Banking Units, Money Changers, etc. (under FEMA)

Transactions Reportable in Form 61A

Here are the Transactions Reportable in Form 61A:

Reporting Person	Transaction Type	Threshold Limit
Banks & Co-op Banks	Cash POs/DDs	₹10 lakhs+ annually
Banks & Co-op Banks	Cash for prepaid RBI instruments	₹10 lakhs+ annually
Banks & Co-op Banks	Cash withdrawals/deposits in current a/c	₹50 lakhs+
Banks, Co-op Banks & Post Offices	Deposits (other than current/time deposits)	₹10 lakhs+
Banks, Post Offices, Nidhi	Credit card bill payments (cash ₹1 lakh+, other modes ₹10 lakhs+)	₹10 lakhs+
Companies issuing bonds/debentures	Receipts from individual	₹10 lakhs+
Companies issuing shares	Share purchase incl. application money	₹10 lakhs+
Listed companies	Share buyback	₹10 lakhs+
Mutual Fund Managers	Investment in MF units	₹10 lakhs+
Forex Dealers	Forex purchases, expenses via cards/drafts, etc.	₹10 lakhs+
Sub-Registrar	Sale/Purchase of immovable property	₹30 lakhs+
Persons under Section 44AB	Cash receipts for sale of goods/services	₹2 lakhs+

Filing a Nil Statement—Is It Mandatory?

There is often confusion about whether persons covered under Section 285BA but who have not entered into any specified financial transaction, must still file Nil Form 61A. Language of the Act: Section 285BA makes it obligatory to furnish information only when a specified financial transaction or reportable account is registered or recorded. Furthermore, CBDT’s Press Release dated 26/05/2017 clarified that: “The registration of a reporting person (ITDREIN registration) is mandatory only when at least one of the transaction types is reportable.” Also, a facility called "SFT Preliminary Response" is available on the income tax portal for reporting persons to indicate non-applicability for the financial year.

Conclusion

As per Section 285BA of the Income Tax Act, read with Rule 114E, only those specified persons who have entered into specified financial transactions are mandated to file Form 61A. Filing a Nil SFT is not mandatory. However, to avoid any doubt or potential notice, it is advisable to submit a Preliminary Response via the e-filing portal, indicating that no reportable transaction occurred during the year.