Format, Procedure and Guidelines for submission of Statement of Financial Transactions  (SFT) for Dividend income

Format, Procedure and Guidelines for submission of Statement of Financial Transactions (SFT) for Dividend income

DGIT(S)/ADG(S)-2/Reporting Portal/2021/180

Government of India
Ministry of Finance
Central Board of Direct Taxes
Directorate of Income Tax (Systems)

Notification No. 1 of 2021

New Delhi, 20 April, 2021

Format, Procedure and Guidelines for submission of Statement of Financial Transactions (SFT) for Dividend income

Section 285BA of the Income Tax Act, 1961 and Rule 114E requires specified reporting persons to furnish statement of financial transaction (SFT).

2. For the purposes of pre-filling the return of income, CBDT has issued Notification No. 16/2021 dated 12.03.2021 to include reporting of information relating to dividend income. The new sub rule 5A of rule 114E specifies that the information shall be furnished in such form, at such frequency, and in such manner, as may be specified by the Director General of Income Tax (Systems), with the approval of the Board.

3. The guidelines for preparation and submission of Statement of Financial Transactions (SFT) information are enclosed in Annexure A and Annexure B respectively. The data structure and validation rules are enclosed in Annexure C and Annexure D respectively. Notification No. 3 of 2018 Dated 5.04.2018 may be referred for the procedure for registration.

4. Reporting entities are required to prepare the data file in prescribed format from their internal system. An excel based report preparation utility has also been provided to assist small reporting entities in preparing data file. The data files prepared by internal system/report preparation utility should be validated using Text File Validator/Submission Utility. After validation, the text file is required to be compressed, encrypted and signed using the Text File Submission Utility before uploading on the reporting portal (https://report.insight.gov.in/). Reporting entities, having large number of data files, can also submit the data files using SFTP Server (specific request may be made for SFTP upload).

5. The statement of financial transactions shall be furnished on or before the 31 ^st May, immediately following the financial year in which the transaction is registered or recorded.

6. The statement of financial transaction shall be signed, verified and furnished by the specified Designated Director. 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. The data files are required to be uploaded at the reporting portal through the login credentials (PAN and password) of the designated director.

Format, Procedure and Guidelines for submission of SFT for Dividend income

7. The reporting entities are advised to provide information of dividend income, reported to Income Tax Department, to the taxpayers which will enable them to reconcile the information displayed in the Annual Information Statement (AIS) (Form 26AS).

8. In case, the reporting person/entity comes to know or discovers any inaccuracy in the information provided in the statement or the defects have been communicated to the reporting person/entity, it is required to remove the defects by submitting a correction/deletion statement.

9. The reporting person/entity is required to document and implement appropriate information security policies and procedures with clearly defined roles and responsibilities to ensure security of submitted information and related information/documents. The reporting person/entity is also required to document and implement appropriate archival and retrieval policies and procedures with clearly defined roles and responsibilities to ensure that submitted information and related information/documents are available promptly to the competent authorities.

10. This Notification shall come into effect from the date of issue.

(Anu J.Singh)
DGIT (System), CBDT

Copy to:

1. PPS to the Chairman and Members, CBDT, North Block, New Delhi.

2. All Pr. Chief Commissioners/ Pr. Director Generals of Income Tax and all Chief Commissioners/ Director Generals of Income Tax — with a request to circulate amongst all officers in their regions/ charges.

3. JS (TPL)-1 &2/ Media coordination and Official spokesperson of CBDT

4. DIT (IT)/ DIT (Audit)/ DIT (Vig.)/ ADG (System) 1, 2, 3, 4, 5,6 / CIT (CPC) Bangalore, CIT (CPC-TDS) Ghaziabad.

5. ADG (PR, PP&OL) with a request for advertisement campaign for the Notification.

6. TPL and ITA Divisions of CBDT.

7. The Institute of Chartered Accountants of India, IP Estate, New Delhi.

8. Web Manager, “incometaxindia.gov.in” for hosting on the website.

9. Database cell for uploading on www.irsofficersonline.gov.in and in DGIT (S) Corner.

10. ITBA publisher for uploading on ITBA portal.

(Sanjeev Singh)
ADG (System)-2 CBDT

Format, Procedure and Guidelines for submission of SFT for Dividend income

Annexure A

Guidelines for Preparation of Statement of Financial Transactions (SFT)

Annexure B

Guidelines for Submission of Statement of Financial Transactions (SFT)

1. Any file which does not meet the validation requirements will be rejected.

2. After upload each upload file will be given unique Statement ID.

3. The file upload status will be as below:

• Uploaded – File uploaded and pending for processing.
• Accepted – File accepted after processing.
• Rejected – File rejected after processing.

4. In case of any error, complete file will be rejected and the rejection reason(s) can be viewed by clicking Rejected link under status column. User need to correct the relevant error(s) and upload the file again.

5. In case Reporting Entity needs to modify uploaded data, Correction Statement is required to be filed. In the Correction Statement, only those reports should be uploaded in which correction is required. Statement ID of the original Statement which is being corrected should be selected while uploading. The Report Serial Number (RSN) along with Original Statement ID will uniquely identify the report which is being corrected. If the correction statement is successfully accepted, the reports in the earlier statement will be marked as inactive and the newly uploaded report will be active.

6. In case Reporting Entity needs to delete uploaded data, Deletion Statement is required to be filed. In the Deletion Statement, only those reports should be uploaded which are to be deleted. Statement ID of the original Statement which is being deleted should be selected while uploading. The Report Serial Number (RSN) along with Original Statement ID will uniquely identify the report which is being deleted. If the Deletion Statement is successfully accepted, the reports in the earlier statement will be marked as inactive.

Annexure C

Data Structure

The information is required to be uploaded in data file. The data file should be in ASCII format with one report per line. All fields in each file should be delimited with the delimiter “|”. The data structure is as under:

Note: The first record in the file should contain header text. There should not be any blank row(s) between reports.

Annexure D

Validation Rules

Upload Level Validations

Upload level validation would be done to ascertain that the correct file is being uploaded. The file would be rejected at the upload stage if it does not clear the upload level validations.

File Level Validations

Any file which does not meet the following requirements will be rejected.

Also Read: Format, Procedure and Guidelines for submission of Statement of Financial Transactions (SFT) for Interest income