As yet another step to curb black money in the system, Statement of Financial Transaction or SFT has been introduced. The new document has to be necessarily filed by different individuals including professionals, financial institutions as well as business set-ups by May 31. The statement shall provide all high-value transactions including cash deposits, property sale or purchase, mutual fund units, debentures, sale of shares etc.
The entities as well as individuals that are brought under the ambit of SFT that is need to file this document with the authorities include banks, forex dealers, nidhis, post offices, NBFCs, companies engaged in the issuance of bonds and debentures, property registrars, listed companies etc.
Among professionals, doctors, lawyers as well as architects are also required to report high value transactions. The salaried class is however excluded from filing the STF.
The earlier requirement of filing the AIR or Annual Information Report has now been substituted with SFT. With it many new time filers will have to report some specified transactions undertaken in the last FY 2016-2017.
SFT also covers any individual who is required to be audited u/s 44AB of the Income Tax Act 1961 that includes businesses as well as professionals.
Any wrong reporting shall attract a huge sum of Rs. 50,000. Furthermore, so that taxpayers can comply with the new reporting required as per SFT, tax officials are organizing workshops to make the practice more clear to Chartered Accountants and other Tax Professionals.