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DoP Clarifies On Submission of Statement of Financial Transactions for Interest Income, Check Details

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The Income-tax Regulation has defined the principle of a statement of financial transaction or reportable account to stay abreast of high-value transactions carried out by the taxpayer. The tax department will use the statement to acquire details regarding specified high-value transactions that an individual made throughout a financial year. Regarding submission of Statement of Financial Transactions for Interest Income, the Department of Posts has released a circular on 05.07.2021. In its circular the DoP has stated that "In continuation to the SB Order No. 0L12077 dated 29.03.2017, the undersigned is directed to inform that Government of India, Ministry of Finance, (Dept. of Revenue, CBDT) vide Notification dated 12.03.2021 issued vide GSR 175(E), has inserted the following sub rule in Rule 114E of Income Tax Rules, L962." According to the circular:

 
DoP Clarifies On Submission of SFTs for Interest Income

For the purposes of pre-filling the return of income, a statement of financial transaction under subsection (l) of section 2858A of the Act containing information relating to capital gains on transfer of listed securities or units of Mutual Funds, dividend income, and interest income mentioned in column (2) of Table below shall be furnished by the persons mentioned in column (3) of the said Table in such form, at such frequency, and in such mannel, as may be specified by the Principal Director General of Income Tax (Systems) or the Director General of Income Tax (Systems), as the case may be, with the approval of the Board, namely:-

Sl. No.Nature of TransactionClass of person (reporting person)
1Capital gains on transfer of listed securities or units of Mutual Funds(i) Recognised Stock Exchange;
(ii) depository as defined in clause (e) of sub-section (1) of section 2 of the Depositories Act, 1996 (22 of 1996);
(iii) Recognised Clearing Corporation ;
(iv) Registrar to an issue and share transfer agent registered under subsection (1) section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992).
2Dividend incomeA Company
3lnterest income(i) A banking company or a co-operative bank to which the Banking Regulation Ac| 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act);
(ii) Post Master General as referred to in clause (j) of section 2 of the Indian Post Office Act, 1898 (6 of 1898).
(iii) Non-banking financial company which holds a certificate of registration under section 45-lA of the Reserve Bank of India Act,1934 (2 of 1934), to hold or accept deposit from public.

Accordingly, for the purpose of pre filing of return income, CBDT, Directorate of Income Tax (Systems) vide notification No. 2 of 2021 dated 20.04.2021 has issued format, procedure and guidelines for submission of Statement of Financial Transactions (SFT) for Interest Income.

 

Statements of Financial Transactions (SFT) in respect of following Transactions are currently being submitted by Circles / Regions.
i). Cash deposits aggregating to ten lakh rupees or more in a financial year, in one or more savings account of a person
ii). One or more accounts having fixed maturity period (other than a time deposit made through renewal of another time deposit) of a person aggregating to ten lakh rupees or more in a financial year of a person.

In addition to the above SFTs, Circles / Regions will process the submission of SFT for Interest Income also at Circle / Region Level.

Circle Wise data in connection with the submission of SFTs in respect of transactions in CBS Post Offices shall be forwarded to Circles by CEPT, Chennai.

Sanchay Post HeIp Desk Team will arrange to provide a tool for extracting the data in respect of the transactions in non CBS post offices where Sanchay Post is available.

Note: Content has been taken from the circular issued by (http://utilities.cept.gov.in/) without any changes apart from the heading.

Story first published: Wednesday, July 7, 2021, 19:05 [IST]
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