Existing provisions of section 285BA of the Act, inter alia, provide for furnishing of statement of financial transaction (SFT) or reportable account by person specified therein.
In order to enable pre-filling of return of income, it is proposed 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. It is also proposed to remove the current threshold of rupees fifty thousand on aggregate value of transactions during a financial year, for furnishing of information, with a view to ensure pre-filling of information relating to small amount of transactions as well. In order to ensure proper compliance, it is also proposed to amend the provisions of sub-section (4) of aforesaid section so as provide that if the defect in the statement is not rectified within the time specified therein, the provisions of the Act shall apply as if such person had furnished inaccurate information in the statement.
Consequently, it is also proposed to amend the penalty provisions contained in section 271FAA so as to ensure correct furnishing of information in the SFT and widen the scope of penalty to cover all the reporting entities under section 285BA.
These amendments will take effect from 1st day of September, 2019.
[Clauses 63 & 66]
Extract of Clauses 63 & 66 of Finance Bill 2019
63. Amendment of section 271FAA.
In section 271FAA of the Income-tax Act, in the opening portion, the words, brackets and letter “clause (k) of” shall be omitted with effect from the 1st day of September, 2019.
66. Amendment of section 285BA.
In section 285BA of the Income-tax Act, with effect from the 1st day of September, 2019,––
(i) in sub-section (1), for clause (k), the following clauses shall be substituted, namely:––
“(k) a prescribed reporting financial institution; or
(l) a person, other than those referred to in clauses (a) to (k), as may be prescribed,”;
(ii) in sub-section (3), the second proviso shall be omitted;
(iii) in sub-section (4), for the words “such statement shall be treated as an invalid statement and the provisions of this Act shall apply as if such person had failed to furnish the statement”, the words “the provisions of this Act shall apply as if such person had furnished inaccurate information in the statement” shall be substituted.
Note on Clauses 63 & 66 of Finance Bill 2019
Clause 63 of the Bill seeks to amend section 271FAA of the Income-tax Act relating to penalty for furnishing inaccurate statement of financial transaction or reportable account.
The said section, inter alia, provides for penalty of a sum of fifty thousand rupees if a person referred to in clause (k) of sub-section (1) of section 285BA furnishes inaccurate information in the statement.
It is proposed to amend the said section so as to extend the penalty for furnishing inaccurate information in the statement to all the persons referred to in sub-section(1) of section 285BA. This amendment will take effect from 1st September, 2019
Clause 66 of the Bill seeks to amend section 285BA of the Income-tax Act relating to obligation to furnish statement of financial transaction or reportable account.
Sub-section (1) of the said section, inter alia, specifies the persons who are required to furnish statement in respect of specified financial transaction or reportable account.
It is proposed to insert a new clause (l) in the said sub-section so as to provide that a person, other than those referred to in clauses (a) to (k), as may be prescribed, shall also be required to furnish a statement under the said section.
Second proviso to sub-section (3) of the said section specifies that the value or aggregate value of prescribed specified financial transaction during a financial year shall not be less than fifty thousand rupees.
It is further proposed to omit the said proviso.
Sub-section (4) of the said section, inter alia, provides that if the defect in the statement is not rectified within the time specified therein, the statement shall be treated as invalid.
It is proposed to amend the said sub-section so as to provide that if the defect in the statement is not rectified within the time specified therein, the provisions of the Act shall apply as if such person had furnished inaccurate information in the statement.
These amendments will take effect from 1st September, 2019.
