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.
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.
The SFTs include-
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,
The most significant components of this Form include –
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 –
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 |
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 |
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.
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.
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.
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’.
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.
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-
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'.