Form 61A

To maintain transparency when it comes to tax filing and to acknowledge income from a specific transaction, taxing entities are required to furnish Form 61A.

To streamline the filing process, taxpayers are required to find out more about the purpose, Form 61A applicability and requirement of this specific form.

What is Form 61A?

Typically, it is a statement of ‘Specified Financial Transactions’ or SFT transaction that taxpayers are required to submit to the government for a given financial period. Form 61A is generated under Section 285 BA of the ITA and was earlier known as Annual Information Return or AIR. 

As per Income Tax Rules 1962, Rule 144E states that details like the type and value of transactions must be reported in Form 61A.

Taxpayers must submit Form 61A on the 31st of May each year immediately upon the completion of the financial year whose details are recorded in it. It helps to maintain a proper record of filing taxes and claiming returns, if applicable.

What is Specified Financial Transactions

The SFTs include-

  • Works contract
  • Accepting any deposit/taking any loan
  • Any investment made/expenditure incurred
  • Sale/purchase/exchange of goods, property, rights, interest in any certain property

Components of Form 61A

Form 61A income tax comprises two parts, namely – Part A, which includes statement level information and the other part (Part B/C/D) is a report statement, i.e. Form 61B.

Generally,

  • Part B is person-based reporting
  • Part C is account-based reporting
  • Part D is immovable property-based reporting

The most significant components of this Form include –

  • Full name
  • Folio number
  • Address
  • PAN
  • Year of Transactions/Financial Year
  • Details of transactions
  • Number and Value of Specified Financial Transactions

Who Has to File Form 61A?

Individuals who are liable for audit under ITA’s Section 44AB can file this document.

The following are some of such entities that are required to file Form 61 Income Tax

  • NBFCs
  • Co-operative banks
  • Nidhi (Referred in Companies Act 2013, under Section 406)
  • Post-Master General
  • Credit card issuers
  • Bonds or debentures issuing companies or institutions 
  • Companies listed on recognised stock exchanges
  • Trustees of mutual funds
  • Off-shore banking units, money changer, authorized dealer and others defined in FEMA, 1999.
  • Sub-registrars or Inspector Generals who were appointed under Registration Act, 1908

Which Transactions are Reported in Form 61A?

Rule 114E’s Annexure A governs the specific transactions which are to be reported in Form 61A of Income Tax Act.

The table below offers a fair idea about such transactions –

Entities Responsible for Submitting Form 61A

Type of Transaction

Limit of Transaction 

Banking institutions, co-operative banks and post offices

Deposits in either one or more accounts.

Over Rs.10 lakh

Banking institutions and co-operative banking institutions

Withdrawals or deposits from a current account.

Over Rs.50 lakh 

Cash payouts for demand drafts and purchase orders.

Over Rs.10 lakh (annually)

Cash payouts for purchasing prepaid RBI investment instruments like RBI bonds.

Over Rs.10 lakh

Companies issuing shares

Receipts from individuals to acquire shares and includes share application money received.

Over Rs.10 lakh (in a year)

Companies or institutions issuing bonds and debentures

Receipts from individuals to acquire bonds or debentures

Over Rs.10 lakh (in a year)

Listed Companies

Share buy-backs

Over Rs.10 lakh

Banking Companies, Postmaster Generals of Post Offices and Co-operative banks

Total online payment of a credit card bill that is issued in a year

Over Rs.10 lakh

Total cash paid in a year against the credit card bill that is issued in a year.

Over Rs.1 lakh

Dealers of foreign exchange

Receipts for sale of foreign currencies or expenses incurred in the said currencies via credit card/debit card or through the issuance of travellers’ cheque, draft or other financial instruments.

Over Rs.10 lakh

Managers or Trustees of mutual funds

Receipts from individuals acquiring mutual fund units.

Over Rs.10 lakh

Inspector Generals or Sub Registrar appointed under Registration Act of 1908

Sale or purchase of immovable properties.

Over Rs.30 lakh

Individuals who are liable for audit under Section 44AB of ITA.

Cash receipts for the sale of goods or rendering services.

Rs.2 lakh

Purpose of Form 61A

Form 61A proves useful for the IT Department as it facilitates effective tracking of high-value transactions. It further helps to ascertain how specific groups of individuals tend to avoid paying taxes. 

The primary purpose of Form 61A is to ensure transparency. Also, it helps taxpayers to maintain a record of all high-value transactions carried in a particular financial year. Under Rule 114B, Clause (a) to (h), taxpayers can use Form 61A instead of PAN card to carry out specified transactions. 

What is the Penalty for Default or Delay?

A 30-day warning is sent to taxpayers who have not filed and submitted this document. Taxpayers are required to file for the same within the designated period. It must be noted that if they still do not file Form 61A, they will have to pay Rs. 500 per day of delay. 

Additionally, a Prescribed Financial Institution is liable to pay a penalty of Rs. 50000 if it provides inaccurate data in Form 61A. Such institutions have a 10-day window to reach out to the concerned authority regarding the inaccuracy of details shared and to get them rectified. 

How to Upload Form 61A?

One can easily upload Form 61A by following these necessary steps –

Step 1 – Visit the designated e-filing portal. 

Step 2 – Login to the portal with the help of User ID, authorised PAN and Password.

Step 3 – Navigate to e-file and upload Form 61A.

Step 4 – Once uploaded, details like – reporting entity PAN, Form Name and reporting entity Category will be displayed on the screen.

Step 5 – Attach Form 61A in zip format along with a signature file.

Step 6 – Click the ‘Upload’ button.

Once the validation process is complete, a message will appear on the screen confirming the upload status.

How to View Form 61A?

One can easily view Form 61A by following these steps –

Step 1 – Login to the e-portal by entering the user ID, PAN and password.

Step 2 – Go to ‘My Account’.

Step 3 – Click on ‘View Form 61A’.

Step 4 – Select Assessment Year and Filing Status.

Step 5 – Click on ‘View Details’.

Step 6 – Check the ‘Filing Status’ field. It will read as Uploaded, Accepted or Rejected.

It must be noted that the updated status appears 24 hours after the file has been uploaded. In case the status reads as ‘Accepted’, individuals can click on the ‘Transaction Number’ and download Form 61A with a simple click on the link – ‘ZIP’.

If the status reads ‘Rejected’, one can avail the details of the specific errors by clicking on ‘Transaction number’.

Due Date to File Form 61A

Every year, the statement of financial transactions for the previous fiscal year must be provided by May 31st. If the concerned assessee does not comply with that, the authorities will send a notice to the taxpayer, requiring him/her to submit the same within 30 days of the notice's issuance.

If the assessee continues to default by failing to respond to the notice, he or she will be fined Rs 500 for each day of default. The penalty will be calculated as of the end of the date that is specified in the notice.

Penalties for Defective Form 61A

If the reporting company or individual discovers any inaccuracy or discrepancy in the information supplied in Form 61A, he must contact the appropriate income tax authorities within ten days to make a correction free of charge.

If the income tax authorities discover that the information on Form 61A is incorrect or insufficient in any manner, they notify the reporting organization or person. The reporting person or entity is allowed 30 days from the date of notification to correct the information.

The Income Tax Act defines the following penalties for failing to provide a corrected Form 61A-

  • A fine of Rs. 50,000 is imposed on reporting businesses and individuals who intentionally provide false information.

  • For default due to providing inaccurate information, a penalty of Rs. 500 per day is assessed from the expiry of the initial due date to the due date specified in the notice. A penalty of Rs. 1000 per day is charged if the due date indicated in the notice is not met.

  • A penalty of Rs. 50,000 is imposed on reporting businesses and individuals who discover inaccuracies in data after submitting the statement but do not notify the appropriate authorities and provide updated information within ten days.

Filing of Statement of Financial Transactions (SFT) Online

Step 1: Firstly, register on the Reporting portal under 'My Account'.
Step 2: Make sure that all the statements uploaded on Reporting Portal should be in the XML format as per the prescribed schema published by the Income Tax Department of India.
Step 3: On XML generation, sign and encrypt the XML using the 'Submission' utility and prepare a package that needs to be uploaded.
Step 4: Complete the submission of the statement on Reporting Portal.

On successful submission, an email will be sent to the registered email id with 'Acknowledgment Number'.

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