Obligation to furnish statement of financial transaction or reportable account {Sec – 285BA, Income-tax Act, 1961}.

1. Any person, being:-

a) An Assesse,

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

c) Local authority or other public body or association,

g) Registrar or Sub-Registrar appointed under section 6 of the Registration Act, 1908 (16 of 1908),

e) Registering authority empowered to register motor vehicles under Chapter IV of the Motor Vehicles Act, 1988,

f) Post Master General as referred to in clause (j) of section 2 of the Indian Post Office Act, 1898,

g) Collector referred to in clause (g) of section 3 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (30 of 2013),

h) Recognized stock exchange referred to in clause (f) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956),

i) Officer of the Reserve Bank of India, constituted under section 3 of the Reserve Bank of India Act, 1934 (2 of 1934),

j) Depository referred to in clause (e) of sub-section (1) of section 2 of the Depositories Act, 1996.

k) Prescribed reporting financial institution,

l) Person, other than those referred to in clauses (a) to (k), as may be prescribed.

who is responsible for registering, or maintaining books of account or other document containing a record of any specified financial transaction[1] or any reportable account as may be prescribed, 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.

2) Statement referred to in 285BA (1) shall be furnished on or before 31st May immediately following the Financial year in which the transaction is registered or recorded {As per Rule 114E the statement shall be furnished in Form 61A}.

3) Where the prescribed income-tax authority considers that the statement furnished under 285BA (1) is defective, he may intimate the defect to the person who has furnished such statement and give him an opportunity of rectifying the defect within a period of 30 days from the date of such intimation or within such further period which, on an application made in this behalf, the said income-tax authority may, in his discretion, allow.

4) If the defect is not rectified within the said period of 30 days or, as the case may be, the further period so allowed, then, notwithstanding anything contained in any other provision of this Act, shall apply as if such person had furnished inaccurate information in the statement.

5) Where a person who is required to furnish a statement under 285BA (1) has not furnished the same within the specified time, the prescribed income-tax authority may serve upon such person a notice requiring him to furnish such statement within a period not exceeding 30 days from the date of service of such notice and he shall furnish the statement within the time specified in the notice.

6) If any person, having furnished a statement under 285BA (1), or in pursuance of a notice issued under 285BA (5), comes to know or discovers any inaccuracy in the information provided in the statement, he shall within a period of 10 days inform the income-tax authority or other authority or agency referred to in 285BA (1), the inaccuracy in such statement and furnish the correct information in such manner as may be prescribed.

7) PENAL CLAUSE:-

I. {Sec.271FAA}:- If a person referred to sec. 285BA (1), who is required to furnish a statement under that section, provides inaccurate information in the statement, and where—

a. Inaccuracy is due to a failure to comply with the due diligence requirement prescribed under sec. 285BA (7) or is deliberate on the part of that person; or

b. Person knows of the inaccuracy at the time of furnishing the statement of financial transaction or reportable account, but does not inform the prescribed income-tax authority or such other authority or agency; or

c. Person discovers the inaccuracy after the statement of financial transaction or reportable account is furnished and fails to inform and furnish correct information within the time specified under sec. 285BA (6), then, the prescribed income-tax authority may direct that such person shall pay, by way of penalty, a sum of Rs.50000/-.

II. Penalty for failure to furnish statement of financial transaction or reportable account {Sec.271FA}:-

a. Failure to furnish a Statement of Financial Transaction within the time prescribed u/s.285BA (2):- Sum of Rs.500/- for every day during which failure continues.

b. Failure to furnish a Statement of Financial Transaction within the time prescribed u/s.285BA (5):- Sum of Rs.1000/- for every day during which failure continues. 

Furnishing of Statement of Financial Transaction {Rule 114E}:-

S.No Nature and Value of Transaction Reporting Person
1 a) Payment made in cash for purchase of bank drafts or pay orders or banker’s cheque of an amount aggregating to Rs.1000000/- or more in a financial year.

b) Payments made in cash aggregating to Rs.1000000/- or more during the financial year for purchase of pre-paid instruments issued by

Reserve Bank of India.

c) Cash deposits or cash withdrawals (including through bearer’s cheque) aggregating to Rs.5000000/- or more in a financial year, in or From one or more current account of a person.

1) Banks

2) Co-operative Banks

2 Cash deposits aggregating to 10 lakh rupees or more in a financial year, in one or more accounts (other than a current account and time deposit) Of a person. 1) Banks

2) Co-Operative Banks

3) Post Master General

3 One or more time deposits (other than a time deposit made through renewal of other time deposit) of a person aggregating to 10 lakh rupees or more in a F.Y of a person. 1)     Banks

2)     Co-operative Banks

3)     Nidhi

4)     NBFC

4 Payments made by any person of an amount aggregating to:-

i.  Rs.100000/- or more in Cash or

ii.  Rs.1000000/- or more by any other mode, against bills raised in respect of one or more credit cards issued to that person, in a F.Y.

1) Banks

2)  Co-operative Banks

Or other Institutions Issuing Credit Cards

5 Receipt from any person of an amount aggregating to Rs.10 lakh or more in a F.Y for acquiring bonds or debentures issued by the Company or Institution. 1)  Company

2) Institution

Issuing Bonds or Debentures.

6 Receipt from any person of an amount aggregating to Rs.10 lakh or more in a F.Y for acquiring Shares issued by the Company Company Issuing Shares
7 Buy back of shares from any person (other than the shares bought in open market) for an amount or value aggregating to Rs.10 lakh or more in a F.Y. Company listed on a recognized stock exchange purchasing its own securities.
8 Receipt from any person of an amount aggregating to Rs.10 lakh or more in a F.Y 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). Trustee of a Mutual Fund or such other person managing the affairs of the Mutual Fund as may be duly authorized by the trustee in this behalf.
9 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 Travelers cheque or draft of any other instrument of an amount aggregating to Rs.10 lakh or more in a F.Y. Authorized person as referred to in Sec.2(C) of FEMA, 1999.
10 Purchase or Sale by any person of Immovable Property for an amount of Rs. 30 lakh or more or valued by the Stamp Valuation Authority referred to in Sec.50C of the Act. Inspector General appointed under the Registration Act, 1908 or Registrar or Sub registrar appointed under that Act.
11 Receipt of Cash Payments exceeding Rs.200000/- for sale, by any Person of Goods or Services of any nature (other than those specified at S.No:- 1 to 10 of this rule). Any Person who is liable for Audit u/s.44AB of the Act.

Determination of Threshold Limit:-

The reporting person mentioned in column (3) of the Table under sub-rule (2) [(other than the persons at Sl.No.10 and Sl.No.11)] shall, while aggregating the amounts for determining the threshold amount for reporting in respect of any person as specified in column (2) of the said Table:-

a) Take into account all the accounts of the same nature as specified in column (2) of the said 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 (c) under column (2), against Sl. No. 1 of the said Table.

[1] Specified Financial Transaction:-

  • transaction of purchase, sale or exchange of goods or property or right or interest in a property; or
  • transaction for rendering any service; or
  • transaction under a works contract; or
  • transaction by way of an investment made or an expenditure incurred; or
  • Transaction for taking or accepting any loan or deposit which may be prescribed.
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