Format, Procedure and Guidelines for submission of Statement of Financial Transactions (SFT) for Depository Transactions-Notification No. 3 of 2021-DGIT Dated: 30th April, 2021

Also Read – Format, Procedure and Guidelines for submission of Statement of Financial Transactions (SFT) for Mutual Fund Transactions by Registrar and Share Transfer Agent – Notification No. 4 of 2021-Income Tax-DGIT Dated: 30th April, 2021

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. 3 of 2021

New Delhi, 30th April, 2021

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

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 Capital gains on transfer of listed securities or units of Mutual Funds. 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

3. The guidelines for preparation and submission of Statement of Financial Transactions (SFT) information are enclosed in Annexure A and Annexure B The format of control statement to be submitted by the Designated Director is given in Annexure C. The data structure and validation rules are enclosed in Annexure D and Annexure E respectively. Notification No. 3 of 2018 dated 05.04.2018 may be referred for the procedure for registration.

4. All Depositories as defined in clause (e) of sub-section (1) of section 2 of the Depositories Act, 1996(22 of 1996) are required to prepare the data file in prescribed format from their internal system. Reporting entities are required to submit the data files using SFTP Server using the login credentials (To be communicated separately).

5. A separate control statement (refer annexure C) is required to be signed, verified and furnished by the Designated Director.

6. The statement of financial transactions relating to Financial Year 2020-21 shall be furnished on or before the 31st May 2021. Thereafter, the statement of financial transactions relating to the quarter ending 30th June, 31st September, 31st December and 31st March shall be furnished on or before 25th of July, October, January and April respectively.

7. The reporting entities are also required to provide information reported to Income Tax Department, to the account holder which will enable taxpayers 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 issues with the approval of CBDT. This Notification shall come into effect from the date of issue.

(Sanjeev Singh)
ADG (Systems)-2, 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)-I &2/ Media coordination and Official spokesperson of CBDT

4. DIT (IT)/ DIT (Audit)/ DIT (Vig.)/ ADG (System) 1, 2, 3, 4, / CIT (CPC) Bangalore, CIT (CPC­TDS) 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, “gov.in” for hosting on the website.

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

10. ITBA publisher for uploading on [TBA portal.

(Sanjeev Singh)
ADG (Systems)-2, CBDT

Annexure A

Guidelines for Preparation of Statement of Financial Transactions (SFT)

The guidelines for preparation of Statement of Financial Transactions (SFT) for Depository transactions are as under:

1. The Depository transaction summary file will be used for pre-filling the gain/income/loss from securities transactions. The Depository Transaction Summary is required to be prepared for user-initiated debit transactions in the demat account. For Off Market debits, information need not be provided if transferor and transferee are same person.

2. In case of a minor, details of legal or natural guardian (PAN, Name etc.) may be

3. The Estimated Sale Consideration for the debit transaction should be determined on the best possible available price of the asset with the depository (e.g. end of day price). The taxpayer will be able to modify the sales consideration before filing the return.

4. The securities should be classified into specified security class for determining the type of asset (short term/long term) and applicable rate.

5. The period of holding (difference between date of sale and date of acquisition of any share/security in the demat account) should be used to classify the asset as short term or long-term asset. First in First out (FIFO) method should be used for identification of corresponding credit in demat account and computation of period of holding. Any capital asset held by the taxpayer for a period of more than minimum period of holding will be treated as long-term capital asset and remaining assets will be classified as short-term asset. The specified minimum period of holding for different asset class is as under:

Security Class Code Security Class Description Minimum Period of Holding
LES Listed Equity Share 12 months
LPS Listed Preference Share 12 months
LDB Listed Debenture 12 months
ZCB Zero Coupon Bond 12 months
CIB Listed Capital Indexed Bond 12 months
EMF Unit of Equity Oriented Mutual Fund 12 months
UTI Unit of UTI 12 months
UBT Unit of Business Trust 36 months
OTU Other Units 36 months
OTH Other Listed Securities (Other than a unit) 12 months

6. For every debit transaction, the corresponding credit transaction should be identified using First in First Out (FIFO) method. The estimated cost of acquisition for the credit should be determined on the best possible available price with the The cost of acquisition can be estimated as per the closing rate on the date (T-2) of transaction for market purchase. The estimated cost of acquisition is to be taken as NIL for OFF Market purchase, IPO or Corporate Action or for any transaction through other than Exchange. The taxpayer will be able to modify the cost of acquisition before filing the return.

7. In relation to a long-term capital asset, being an equity share in a company or a unit of an equity-oriented fund acquired before the 1st day of February, 2018, adjusted cost of acquisition shall be higher of (i) the cost of acquisition of such asset; and (ii) lower of (A) the fair market value of such asset as on 31st January, 2018; and (B) the full value of consideration received or accruing as a result of the transfer of the capital asset. In a case where the capital asset is listed on any recognized stock exchange as on the 31st day of January, 2018, “fair market value” means the highest price of the capital asset quoted on such exchange on the said If there is no trading in such asset on such exchange on the 31st day of January, 2018, the highest price of such asset on such exchange on a date immediately preceding the 31st day of January, 2018 when such asset was traded on such exchange shall be the fair market value. In case the cost of acquisition of asset acquired before the 1st day of February, 2018 is not easily available, the adjusted cost of acquisition may be taken as lower of (A) the fair market value of such asset; and (B) the full value of consideration.

8. The Cost Inflation Index should be used to determine estimated indexed cost of acquisition wherever applicable.

9. The details of demat account holders and summary values for the demat account for the reporting period should be reported in Depository Account Summary (DEP_ACC_SU MM.TXT).

10. The details of off-market transactions recorded by the depository during the year should be reported in Depository Off-Market Transactions (DEP_OFF_TRN.TXT).

Annexure B

Guidelines for Submission of Statement of Financial Transactions (SFT)

1. Reporting entities are required to prepare the data file in prescribed format from their internal system. Reporting entities are required to submit the data files using SFTP Server using the login credentials (To be communicated separately). A separate control statement (refer Annexure C) is required to be signed, verified and furnished by the Designated Director.

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

3. In case Reporting Entity needs to modify uploaded data, Correction Statement is required to be filed. In the Correction Statement, only those records should be uploaded in which correction is required. In case Reporting Entity needs to delete uploaded data, Deletion request is required to be filed.

Annexure C

Control Statement for Depository Transactions

Number of Records Values
A.1 Reporting Entity Name
A.2 ITDREIN
A.3 Registration Number
A.4 Statement Type
A.5 Statement Number
A.6 Original Statement Id
A.7 Reason for Correction
A.8 Statement Date
A.9 Reporting Period Start Date
A.10 Reporting Period End Date
Number of Records
B.1 Depository Batch File (DEP_BATCH.TXT)
B.2 Depository Account Summary (DEP_ACC_SUMM.TXT)
B.3 Depository Transaction Summary (DEP_TRN_SUMM.TXT)
B.4 Depository Off-Market Transaction (DEP_OFF_TRN .TXT)
Sum of Key Values in Rs. (Refer Depository Account Summary)
C.1 Opening Value
C.2 Market Credits
C.3 Market Debits
C.4 Off-Market Credits
C.5 Off-Market Debits
C.6 IPO Credits
C.7 Corporate Action Credits
C.8 Corporate Action Debits
C.9 Dematerialized Credits
C.10 Rematerialized Debits
C.11 Pledge Invocation Credits
C.12 Pledge Invocation Debits
C.13 Closing Value

I, declare that to the best of my knowledge and belief, the information given in the data files is correct and complete and is in accordance with the provisions of the Income-tax Act, 1961.

Name ______
Designation ______

Annexure D

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 first record in the file should contain header text.

D.1. Depository Batch File (DEP_BATCH.TXT)

This file contains details of reporting entity, principal officer and files uploaded by the reporting entity

#. Field Name Mandatory Format Remarks
1. Reporting Entity
Name
Y VARCHAR (150) Reporting Entity Name
2. ITDREIN Y VARCHAR (20) Registration number allotted by ITD
3. Registration Number N VARCHAR (150) SEBI Registration
number
4. Statement Type Y VARCHAR (2) NB – New Statement containing new
information DB – Deletion Statement CB – Correction Statement containing corrections for previously submitted
information
5. Statement Number Y VARCHAR (20) Internal reference number for reporting entity
6. Original Statement Id Y DECIMAL (18,0) Statement ID of the original Statement
which is being replaced deleted or referred in the current Statement. In case the Statement is new and unrelated to any previous Statement, mention ‘0’ here.
7. Reason for Correction Y VARCHAR (1) Reason for revision to be stated when the original Statement is corrected. (Refer Permissible values)
8. Statement Date Y DATE Statement Date DD­MM-YYYY
9. Reporting Period
Start Date
Y DATE First day of the reporting period DD-MM-YYYY
10. Reporting Period End Date Y DATE Last day of the reporting period DD-MM-YYYY
11. Principal Officer
Name
Y VARCHAR (150)
12. Principal Officer
Designation
Y VARCHAR (150)
13. Principal Officer
Address
Y VARCHAR (500)
14. Principal Officer
Mobile
Y VARCHAR (15)
15. Principal Officer
Email
Y VARCHAR (50)

D.2. Depository Account Summary (DEP_ACC_SUMM. TXT)

This file contains details of demat account holders and summary values for the demat account for the reporting period.

#. Field Name Mandatory Format Remarks
1. Sequence Number Y DECIMAL (18,0) Running sequence number for each line in the file.
2. Financial Year Y VARCHAR (4) FY in which sale transaction was recorded-YYYY
3. Reporting Period Y DATE Last day of the reporting period DD-MM-YYYY
4. DP ID Y VARCHAR (8) First part of Demat Account Number
5. Client ID Y VARCHAR (8) Second part of Demat Account Number
6. DP Name Y VARCHAR (100) Depository Participant’s Name
7. Client PAN Y VARCHAR (10) First Holder’s PAN. Mention PANNOTAVBL if no PAN is available.
8. Client Name Y VARCHAR (250) First Holder’s name
9. Client Type Y VARCHAR (1) R – Resident

N- Non-resident

F – FII

Z – Not Classified

10. Client Status Y VARCHAR (1) M – Minor

O – Other

X- Not Classified

11. Guardian Name N VARCHAR(250) Mandatory if Client Status is ‘Minor’
12. Guardian PAN N VARCHAR(10) Mandatory if Client Status is ‘Minor’. Mention PANNOTAVBL if no PAN is available.
13. Client Aadhaar N VARCHAR (12) First Holder’s Aadhaar
14. Client DOB N DATE First Holder’s DOB/DOI in DD-M M-YYYY
15. Client Address Y VARCHAR (500) First Holder’s Address
16. Client City N VARCHAR (40) First Holder’s Address-city
17. Client State code N VARCHAR (2) First Holder’s Address- State (Refer Permissible Values)
18. Client Pincode N DECIMAL (6,0) First Holder’s Address-Pincode
19. Client Mobile
Number
N VARCHAR (15) First Holder’s Mobile Number
20. Client E-mail ID N VARCHAR (100) First Holder’s E-mail ID
21. Joint holding Y VARCHAR (1) Whether joint holding exists (Y/N)
22. Second Holder PAN N VARCHAR (10) Mandatory if Joint holding exists. Mention NOPANAVBL if no PAN is available
23. Second Holder
Name
N VARCHAR (250) Mandatory if Joint holding exists
24. Second Holder DOB N DATE Second Holder’s DOB/DOI in DD-M M-YYYY
25. Third Holder PAN N VARCHAR (10) Mandatory if Joint holding exists. Mention NOPANAVBL if no PAN is available
26. Third Holder Name N VARCHAR (250) Mandatory if Joint holding exists
27. Third Holder DOB N DATE Third Holder’s DOB/DOI in
DD-M M-YYYY
28. Opening Value Y DECIMAL (18,2) Value of Holding as on first day of reporting period
29. Market Credits Y DECIMAL (18,2) Sum of Market Purchases
during reporting period
30. Market Debits Y DECIMAL (18,2) Sum of Market Sales during reporting period
31. Off-Market Credits Y DECIMAL (18,2) Sum of Off-market purchases during reporting period
32. Off-Market Debits Y DECIMAL (18,2) Sum of Off-market Sales during reporting period
33. IPO Credits Y DECIMAL (18,2) Sum of value credited on account of IPO during
reporting period
34. Corporate Action
Credits
Y DECIMAL (18,2) Sum of value credited on account of Corporate Actions during reporting period
35. Corporate Action
Debits
Y DECIMAL (18,2) Sum of value debited on account of Corporate Actions during reporting period
36. Dematerialized Credits Y DECIMAL (18,2) Sum of value dematerialized (Credit) during reporting period
37. Rematerialized Debits Y DECIMAL (18,2) Sum of value rematerialized (Debit) during reporting period
38. Pledge Invocation
Credits
Y DECIMAL (18,2) Sum of value credited on account of Pledge Invocation during reporting period
39. Pledge Invocation
Debits
Y DECIMAL (18,2) Sum of value debited on account of Pledge Invocation during reporting period
40. Closing Value Y DECIMAL (18,2) Total Value of Holding as on the last day of reporting period

D.3. Depository Transaction Summary (DEP_TRN_SU M M.TXT)

This file shall contain details of security level transaction summary in respect of sales/debits during the reporting period.

# Field Name Mand atory Format Remarks
1. Sequence Number Y DECIMAL (18,0) Running sequence number for each line in the file.
2. Financial Year Y VARCHAR (4) FY in which sale transaction was recorded-YYYY
3. Reporting Period Y DATE Last day of the reporting period DD­MM-YYYY
4. DP ID Y VARCHAR (8) First part of Demat Account Number
5. Client ID Y VARCHAR (8) Second part of Demat Account Number
6. Client PAN Y VARCHAR (10) PAN Validation will be done during data loading
7. Client Name Y VARCHAR (250) First Holder’s name
8. Security Class Code Y VARCHAR (3) Refer Permissible values
9. Security Code Y VARCHAR (12) Unique security code (e.g. ISIN)
10. Security Name Y VARCHAR (200) Name of security
11. Debit Date Y DATE Date of Debit
12. Debit Type Y VARCHAR (1) Refer Guidelines M – Market

O – Off Market

13. Credit Type Y VARCHAR (1) Refer Guidelines M – Market

O – Off Market

14. Asset Type Y VARCHAR (1) Refer Guidelines S – Short Term L – Long Term
15. Units Y DECIMAL (18,3) Units sold or transferred. Refer Guidelines.
16. Unit Sale price Y DECIMAL (18,2) Estimated Sale price per unit.
17. Sale Consideration Y DECIMAL (18,2) Estimated Sale Consideration. Refer Guidelines
18. COA Y DECIMAL (18,2) Estimated Cost of acquisition without indexation. Refer Guidelines.
19. Unit FMV Y DECIMAL (18,2) FMV per unit as on 31.01.2018. Refer Guidelines
20. Total FMV Y DECIMAL (18,2) Total FMV as on 31.01.2018. Refer Guidelines
21. Adjusted FMV N DECIMAL (18,2) If the long term capital asset was acquired before 01.02.2018, Lower ofSale Consideration and Total FMV. Refer Guidelines
22. Adjusted COA N DECIMAL (18,2) Cost of acquisition without indexation (higher of COA and Adjusted FMV)
23. Indexed COA N DECIMAL (18,2) Wherever applicable

Note: Refer Guidelines for preparation of SFT for more details

D.4. Depository Off-Market Transaction (DEP_OFF_TRN.TXT)

This file shall contain details of off-market transactions recorded for a person/client by the depository during the year.

# Field Name Mandato ry Format Remarks
1. Sequence Number Y DECIMAL (18,0) Running sequence number for each line in the file.
2. Financial Year Y VARCHAR (4)
3. Reporting Period Y DATE Last day of the reporting period
4. Transfer Date Y DATE Date format- DD-MM-YYYY
5. Transferor DP ID Y VARCHAR (8)
6. Transferor Client ID Y VARCHAR (8)
7. Transferor DP Name Y VARCHAR (100) Depository Participant’s Name
8. Transferor PAN Y VARCHAR (10) Mention PANNOTAVBL if no PAN is available.
9. Transferor Name Y VARCHAR (250) First Holder’s name
10. Transferee DP ID Y VARCHAR (8)
11. Transferee Client ID Y VARCHAR (8)
12. Transferee DP Name Y VARCHAR (100)
13. Transferee PAN Y VARCHAR (10)
14. Transferee Name Y VARCHAR (250)
15. Security Class Code VARCHAR (3) Refer Permissible values
16. Security Code Y VARCHAR (12) Unique Security Code (e.g. ISIN)
17. Security Name Y VARCHAR (200) Name of Security
18. Quantity transferred Y DECIMAL (18,3)
19. Reported Consideration N DECIMAL (18,2) Consideration reported during transfer
20. EOD Price per unit Y DECIMAL (18,2) Per Unit End of day price
21. EOD Value Y DECIMAL (18,2) Estimated Transaction Value (End of day price)
22. Reason code Y VARCHAR (3) Reason Code. Refer permissible values
23. Reason Y VARCHAR (500) Reason

Permissible Values – Statement Type

# Code Description
1. NB New Batch (Statement) containing new information
2. DB Deletion Batch (Statement)
3. CB Correction Batch (Statement) containing corrections for
previously submitted information

Permissible Values – Reason for Correction

# Code Description
1. A Acknowledgement of original Statement had many errors which are being resolved
2. B Errors in original Statement are being corrected suo-motu
3. C The correction report is on account of additional information being submitted
4. N Not applicable as this is a new statement/test data/ there is no data to report
5. Z Other reason

Permissible Values – Security Class Code

# Security Class Code Description
1. LES Listed Equity Share
2. LPS Listed Preference Share
3. LDB Listed Debenture
4. ZCB Zero Coupon Bond
5. CIB Listed Capital Indexed Bond
6. EMF Unit of Equity Oriented Mutual Fund
7. UTI Unit of UTI
8. UBT Unit of Business Trust
9. OTU Other Units
10. OTH Other Listed Securities (Other than a unit)

Permissible Values – Transaction Reason

# Reason Code Reason Description
1. ACL Account Closure
2. BEN Trust to Beneficiaries/on HUF dissolution to Karta & Coparceners
3. CDR Certificate of Deposit Redemption
4. DRC Conversion of Depository Receipt (DR) to underlying securities and vice versa
5. CPI Commercial Paper Issuance
6. DRW Dissolution/Restructuring/Winding up of Partnership Firm/Trust
7. DUE Meeting Legitimate Dues of Stock Broker
8. ERR Erroneous Transfer pertaining to Client Securities
9. ESP ESOP/Transfer to employee
10. FAM Transfer between specified family members
11. FPM Transfers from PMS account
12. GFT Gift/Donation
13. MGR Margin returned by stock broker / PCM
14. MGT Margin to stock broker / PCM
15. MIN Transfer between Minor Account and Guardian Account
16. MRG Merger/ Demerger of corporate entity
17. OFS Off-market Sale
18. ONS On-market Sale (Transfer towards Pay-in)
19. OOA Open Offer for Acquisition
20. OOB Open Offer/Buy-back
21. ORD Implementation of Govt./Regulatory Direction/Orders
22. OWN Transfer to own account
23. PAY Payout – On payments for unpaid securities
24. PRT Transfer between Partner and Firm, Director and Company
25. RED Redemption of Mutual Fund Units
26. REF Refund of securities by IEPF Authority
27. TPM Transfers to PMS account
28. TRP Transposition – Between joint account of same holders
29. OTH Other
30. ZZZ Not Specified

Permissible Values – State code

# State/Union Territories Code
1. Andaman and Nicobar AN
2. Andhra Pradesh AP
3. Arunachal Pradesh AR
4. Assam AS
5. Bihar BR
6. Chandigarh CH
7. Dadra and Nagar Haveli DN
8. Daman and Diu DD
9. Delhi DL
10. Goa GA
11. Gujarat GJ
12. Haryana HR
13. Himachal Pradesh HP
14. Jammu and Kashmir JK
15. Karnataka KA
16. Kerala KL
17. Lakshadweep LD
18. Madhya Pradesh MP
19. Maharashtra MH
20. Manipur MN
21. Meghalaya ML
22. Mizoram MZ
23. Nagaland NL
24. Orissa OR
25. Pondicherry PY
26. Punjab PN
27. Rajasthan RJ
28. Sikkim SK
29. Tamil Nadu TN
30. Telangana TS
31. Tripura TR
32. Uttar Pradesh UP
33. West Bengal WB
34. Ladakh LA
35. Chhattisgarh CG
36. Uttarakhand UK
37. Jharkhand JH

Table – Capital Gain Index Chart

Financial Year Cost Inflation Index (CII)
2001-02 (Base year) 100
2002-03 105
2003-04 109
2004-05 113
2005-06 117
2006-07 122
2007-08 129
2008-09 137
2009-10 148
2010-11 167
2011-12 184
2012-13 200
2013-14 220
2014-15 240
2015-16 254
2016-17 264
2017-18 272
2018-19 280
2019-20 289
2020-21 301

Annexure E

Validation Rules

The errors have been classified in following categories:

Errors Schema level errors which need to be resolved by user for successful generation of XML report.
Defects The reporting entity needs to correct and submit the reports again in the corrected statement.
Exceptions The exceptions should be reviewed by the reporting person/entities and if any information is available, the reporting entity may provide the information. If any defect is noticed, the reporting entity needs to rectify the defect by submitting a correction statement.

The validation rules are as under:

S. No. Error Message Error Type File Rejection
1. Control Statement Values Mismatch Error Y
2. Sequence Number in Submitted file is not
running sequence number
Error Y
3. Account Summary Data not provided for
reported transaction
Defect N
4. Mandatory Field is blank Defect N
5. Invalid PAN reported Exception N
6. Excessive Value Reported Exception N
7. Mismatch identified after matching data with other submitted data Exception N

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