Navneet Singal

We all are aware about the Scrutiny Proceedings in the case of ITR which is usually a trauma for each and every person. Now-a-days, CBDT has given instructions to select the cases for scrutiny on the basis of some specific transactions if entered in by any person. Regarding these transaction Income Tax Department (ITD) is collecting the data from different authorities or companies through Annual Information Return (AIR). When we do some transaction over and above a limit through a Financial Year (FY), our cases can be selected for scrutiny on random basis which is done by ITD through Computer aided software system (CASS).

Vide Notification 95/2015, dated December 30, 2015, CBDT has modified the rules (i.e. Rule 114E r.w.s. 285AB) related to Filing of AIR. Now the AIR return will be called as Statement of Financial Transaction (SFT), where specified persons will be required to file the return, if the nature & class of the transaction falls into the list specified. These rules will be effective for the transactions entered on or after April 1, 2016. Gist of these transactions and respective specified person can be described as follows:

S. No.Nature and Value of TransactionAggregated Minimum Value of Transaction in a FY (Rupees in lakhs)Reporting Person
(1)(2)(3)(4)
1.(a) Cash deposits or cash withdrawals (including through bearer’s cheque) aggregating to fifty lakh rupees or more in a financial year, in or from one or more current account of a person.50A banking company or a co-operative bank or Post Master General/NBFC/Nidhi
(b) Purchase of Bank Draft/pre-paid financial instruments10
(c) One or more time deposits of a person10
(d) Cash deposit (other than a current account and time deposit) of a person.10
(e) Payment made for credit card1 (in cash) 10 (any other mode)
2.Receipt from any person of an amount (including share application money). However, it doesn’t include amount received on account of renewal)10A company or institution issuing Bond/Debenture/Shares
3.Buy back of shares (other than shared from the open market) 10A company listed on a recognized stock exchange
4.Receipt from any person for acquiring units10A trustee of mutual fund.
5.Receipt from any person for sale of foreign currency10Authorized person under FEMA
6.Purchase or sale of immovable property (Value as per stamp valuation authority)10Registrar or sub-registrar or IG appointed under Registration Act, 1908
7.Receipt of cash payment for sale of goods or services of any nature (other than mentioned above)2Any person who is liable to audit under section 44AB of the Act.

 The above table shows a list of all those transactions which are required to be filed by respective reporting person in Form No. 61A with the Income Tax Department. On the basis of these details, the Income Tax Department can get select your case for the scrutiny.

Further, all of the reporting person as mentioned in Column (4) are required to file Return in Form No: 61A. If we leave the specific authorities/banks, in general this clause is applicable to companies or other person for S.No.2, 3, & 7 as mentioned above.

W.e.f. April 1, 2016 all companies will be required to collect the details to file the return in Form No: 61A if they entered in any transaction as mentioned above. The return in Form 16A is required to be filed by 31st May of the immediately following FY and the reporting person is also required to obtain the registration number from the Department.

(Author may be contacted at navneet.singal@gmail.com )

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