Specified Financial Transactions and Reportable Accounts

A. Section 285 BA: Obligation to furnish statement of financial transaction or reportable account:

Sub – Section Section 285BA
 

1

Specified Person shall furnish a statement in respect of such specified financial transaction or such reportable account which is registered or recorded or maintained by him and information relating to which is relevant and required for the purposes of this Act, to the income-tax authority or such other authority or agency as may be prescribed.

Specified Person means Any Person being:

a) An assessee as specified under Section 2(7) of Income Tax Act, 1961,

b) The prescribed person in the case of an office of Government,

c) A local authority or other public body or association,

d) Registrars or Sub-Registrars appointed under section 6 of the registration Act, 1908,

e) Motor Vehicles registration authority as specified under Chapter IV of the Motor Vehicles Act, 1988,

f) The Post Master General as referred to in the Indian Post Office Act, 1898,

g) Collector in case of Land acquisitions Rehabilitation and Resettlement Act, 2013,

h) Recognized stock exchanges referred to in of the Securities Contracts (Regulation) Act, 1956,

i) An officer of Reserve Bank of India(RBI)

j) A Depository referred to in the Depositories Act, 1996

k) Any prescribed reportable financial Institution

l) A person, other than those referred above.

 

2.

Read with Sub – Rule (5) of Rule 114E.

 

The statement referred to in sub-section (1) shall be furnished electronically in Form 61A(Form 61B in the case of Financial institution)on or before 31st May immediately following the Financial Year (FY) in which the transactions are registered or recorded.
 

3

“Specified financial transaction” means any Transaction involving:

a) Purchase, sale or exchange of goods or property or right or interest in a property, or

b) Rendering any service, or

c) Works contract, or

d) The investment made or an expenditure incurred, or

e) Taking or accepting any loan or deposit.

Which may be prescribed by the Board in this regard.

Provided that the board (CBDT) may prescribe different values for different transactions in respect of different persons having regard to the nature of such transaction.

 

4

Where the statement furnished under sub – section (1) is found defective by Income – tax authority then:

a) He (Income – tax authority) may intimate the same to the specified person (who has filed form 61A).

b) The assessee would get an opportunity for rectifying the defect within 30 days

i. From the date of intimation, or

ii. Such further period allowed by the income tax authority on considering the application made by the assessee in this behalf.

c) If the defect is not verified even after the time period allowed (in (b) above) then the provision of this Act (Income Tax Act 1961) shall apply as if such person had furnished inaccurate information in the statement.

5 Consequences if the assessee does not furnishes the statement within 31st May, of the immediate following Financial Year:

a) The Income tax authority may serve a notice requesting the assessee to furnish the statement within 30 days from the date of issuing such notice and the assessee shall furnish the statement within the time specified in the notice.

6 On furnishing the statement under sub – section (1) or (5) above, he (assessee) discovers any inaccuracy in the information provided in the statement he shall intimate the same to the income-tax authority or other authority or agency and shall furnish the correct information in the manner as may be prescribed.
7 The Central Government may, by rules made under this section, specify:

a) The persons referred to in sub-section (1) to be registered with the prescribed income-tax authority,

b) The nature of information and the manner in which such information shall be maintained by the persons referred to in clause (a), and

c) The due diligence to be carried out by the persons for the purpose of identification of any reportable account referred to in sub-section (1).

B. Rule 114E: Furnishing of statement of financial transaction:

I. Sub – Rule (1):The statement of financial transaction required to be furnished under sub-section (1) of section 285BA of the Act shall be furnished in respect of a financial year in Form No. 61A and shall be verified in the manner indicated therein.

II. Sub – Rule (2):The statement referred to in sub-rule (1) shall be furnished by every person (mentioned in column Class of Person) of the Table below in respect of all the transactions of the nature and value specified in the corresponding entry in column (2) of the said Table in accordance with the provisions of sub-rule (3), which are registered or recorded by him on or after the 1st day of April, 2016, namely:

Class of Person Nature of Transaction
 

A Bank including a Co-operative Bank

1. Payment made in cash:

a) For purchase of bank drafts or pay orders or banker’s cheque of an amount aggregating to ₹ 10 Lakh or more in a financial year.

b) Aggregating to ₹ 10 Lakh or more during the financial year for purchase of pre-paid instruments issued by Reserve Bank of India.

c) Payments made by any person of an amount aggregating to:

i. ₹ 1 Lakh or more in cash, or

ii. ₹10 Lakh or more by any other mode, against bills raised in respect of one or more credit cards issued to that person, in a financial year.

2. Cash deposits or cash withdrawals (including through bearer’s cheque) aggregating to ₹ 50 Lakh or more in a financial year, in or from one or more current account of a person.

3. Cash deposits aggregating to ₹ 10 Lakh or more in a financial year, in one or more accounts (other than a current account and time deposit) of a person.

4. One or more time deposits (other than a time deposit made through renewal of another time deposit) of a person aggregating to ₹ 10 Lakh or more in a financial year of a person.

 

 

Post Office/Post Master General

 

1. Cash deposits aggregating to ₹ 10 Lakh or more in a financial year, in one or more accounts (other than a current account and time deposit) of a person.

2. One or more time deposits (other than a time deposit made through renewal of another time deposit) of a person aggregating to ₹ 10 Lakh or more in a financial year of a person.

 

Company

 

1. A company or institution issuing bonds or debentures:Receipt from any person of an amount aggregating to ₹ 10 Lakh or more in a financial year for acquiring bonds or debentures issued by the company or institution (other than the amount received on account of renewal of the bond or debenture issued by that company).

2. A company issuing shares:Receipt from any person of an amount aggregating to ₹ 10 Lakh or more in a financial year for acquiring shares (including share application money) issued by the company.

3. Company listed under section 68 of Companies Act, 2013 (Power of company to purchase its own securities): Buy back of shares from any person (other than the shares bought in the open market) for an amount or value aggregating to ₹ 10 Lakh or more in a financial year.

4. If the company is liable for Compulsory tax audit u/s 44AB:Receipt of cash payment exceeding ₹ 2 Lakh for sale, by any person, of goods or services of any nature.

Non- Banking Financial Companies (NBFCs) and Nidhi Company One or more time deposits (other than a time deposit made through renewal of another time deposit) of a person aggregating to ₹ 10 Lakh or more in a financial year of a person.
A trustee of a Mutual Fund or such other person managing the affairs of the Mutual Fund as may be duly authorised by the trustee in this behalf. Receipt from any person of an amount aggregating to ₹ 10 lakh or more in a financial year for acquiring units of one or more schemes of a Mutual Fund (other than the amount received on account of transfer from one scheme to another scheme of that Mutual Fund).
Authorised person as referred to in clause (c) of section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999). Receipt from any person for sale of foreign currency including any credit of such currency to foreign exchange card or expense in such currency through a debit or credit card or through issue of travellers’ cheque or draft or any other instrument of an amount aggregating to ten lakh rupees or more during a financial year.
Inspector-General appointed under section 3 of the Registration Act, 1908 or Registrar or Sub-Registrar appointed under section 6 of that Act. Purchase or sale by any person of immovable property for an amount of thirty lakh rupees or more or valued by the stamp valuation authority referred to in section 50C of the Act at thirty lakh rupees or more.
Any person who is liable for audit under section 44AB of the Act. Receipt of cash payment exceeding two lakh rupees for sale, by any person, of goods or services of any nature
 

Individuals

 

(Additions as on 13th August, 2020)

 

1. Payment to hotels above ₹ 20,000

2. Payment of property tax above ₹ 20,000

3. Payment of health insurance premium above ₹ 20,000

4. Payment of rent above ₹ 40,000

5. Payment of life insurance premium above ₹ 50,000

6. Electricity consumption above ₹ 1 lakh

7. Payment of educational fee/donations above ₹ 1 lakh per annum

8. Purchase of jewellery, white goods, painting, marble etc. above ₹ 1 lakh

9. Deposit/credits in the current account above ₹ 50 lakh

10. Deposit/credits in the non-current account such as savings accounts above ₹ 25 lakh

11. Domestic business class air travel or foreign travel

12. Share transactions/D-MAT accounts/Bank lockers

13. A person having bank transactions above ₹ 30 lakhs

14. All professionals and business having turnover above ₹ 50 lakhs

III. Sub – Rule (3): Such reporting persons shall, while aggregating the amounts for determining the threshold amount for reporting in respect of any person (class of person above)

a. Take into account all the accounts of the same nature as specified in column (2) of the Table maintained in respect of that person during the financial year,

b. Aggregate all the transactions of the same nature as specified in column (2) of the said Table recorded in respect of that person during the financial year,

c. Attribute the entire value of the transaction or the aggregated value of all the transactions to all the persons, in a case where the account is maintained or transaction is recorded in the name of more than one person,

d. Apply the threshold limit separately to deposits and withdrawals in respect of transaction specified in item A Bank including a Co-operative Bank. (Nature of transaction: 2)

IV. Sub – Rule (4):

a. The return in Form No. 61A referred to in sub-rule (1) shall be furnished to:

> The Director of Income-tax (Intelligence and Criminal Investigation) or

> The Joint Director of Income-tax (Intelligence and Criminal Investigation)

Through online transmission of electronic data to a server designated for this purpose under the digital signature of the person specified in sub-rule (7) and in accordance with the data structure specified in this regard by the Principal Director General of Income-tax.

b. Provided that in case of a reporting person, being a Post Master General or a Registrar or an Inspector General referred to in sub-rule (2), the said return in Form 61A may be furnished in a computer readable media, being a Compact Disc or Digital Video Disc (DVD), along with the verification in Form-V on paper.

c. Principal Director General of Income-tax (Systems) shall specify the procedures, data structures and standards for ensuring secure capture and transmission of data, evolving and implementing appropriate security, archival and retrieval policies.

d. The Board may designate an officer as Information Statement Administrator, not below the rank of a Joint Director of Income-tax for the purposes of day to day administration in relation to the furnishing of returns or statements.

V. Sub – Rule (5):

a. Statement of Financial Transaction specified under Sub – Rule (1) on or before 31st May immediately following the Financial Year (FY) in which the transactions are registered or recorded

VI. Sub – Rule (6):

a. Every reporting person mentioned under sub-rule (2) shall communicate to the Principal Director General of Income-tax (Systems) the name, designation, address and telephone number of the Designated Director and the Principal Officer and obtain a registration number.

b. It shall be the duty of every person (Class of person), its Designated Director, Principal Officer and employees to observe the procedure and the manner of maintaining information as specified by its regulator and ensure compliance with the obligations imposed under section 285BA of the Act and rules 114B to 114D and this rule.

VII. Sub – Rule (7):

a. The statement of financial transaction referred to in sub-rule (1) shall be signed, verified and furnished by the Designated Director specified in sub-rule (6):

b. Provided that where the reporting person is a non-resident, the statement may be signed, verified and furnished by a person who holds a valid power of attorney from such Designated Director.

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