The specified person is required to furnish the statement of financial transactions / reportable account, in respect of the specified transactions, in terms of provisions of section 285BA of the Income Tax Act. In case the person fails to furnish the same, the defaulter would be liable to pay the penalty under provisions of section 271FA of the Income Tax Act.
The current article covers the penalty provisions of section 271FA. The article also explains the relevant provisions of section 285BA and amount of penalty payable under section 271FA.
First of all, let us understand the basic provisions of section 271FA, which states as under –
The penalty provisions of section 271FA are applicable only in case of the following failures –
a. Failure in furnishing the statement of financial transaction / reportable account as required under section 285BA (1) within the time limit prescribed under section 285BA (2); or
b. Failure in furnishing the statement of financial transaction / reportable account within the period specified in the notice issued under section 285BA (5).
In order to understand the coverage / applicability of the penalty section 271FA, it is important to understand the related provisions of section 285BA.
As per rule 114E of the Income Tax Rules, following is the list of persons who are required to file the statement of financial transactions –
Please note here one needs to refer to Rule 114E of the Income Tax Rules which provides a listing of different values for the different transaction with respect to a different class of person required to submit the statement of the financial transaction.
The statement of financial transactions is to be filed in Form No. 61A.
The statement of financial transactions should be furnished on or before 31st May subsequent to the Financial Year in which the transaction is registered / recorded.
Section 285BA (5) states that in case the specified person fails to submit the statement of the financial transaction within the prescribed time limit, then, the income tax authority may serve the notice. The notice requires the person to submit the statement of a financial transaction within the period specified therein.
In case of default, the defaulter would be liable to pay the penalty as tabulated hereunder –
Type of failure | Amount of penalty |
Failure in furnishing the statement of financial transaction / reportable account as required under section 285BA (1) within the time limit prescribed under section 285BA (2). | INR 500 per day till the failure continues |
Failure in furnishing the statement of financial transaction / reportable account within the period specified in the notice issued under section 285BA (5). | INR 1000 per day till the failure continues |
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