Delayed SFT filing attracts penalty: I-T department

NEW DELHI : The Income Tax department has urged entities that have the obligation to file statement of financial transactions (SFT) to furnish this report by 31 May to avoid penalty.

SFT is an annual report entities like banks, cooperative banks and Nidhi companies, non-bank lenders, companies issuing dividend and issuers of debentures, bonds and shares have to file with the Income Tax department regarding transactions above specified monetary threshold.

Foreign exchange dealers and certain capital market players are also required to submit SFT. This is part of the reporting requirement under the Income Tax Act which enables the tax authority to monitor economic activity.

“Last date to file Statement of Financial Transactions for FY23 is May 31, 2023. Delay in filing SFT may entail penalty upto 1000 for each day of default. Non-filing or filing inaccurate statement may also lead to levy of penalty,” the department said in a social media post while urging these entities to file the report by the due date.

Experts said that the information collected from SFT will help the income tax department to pre-fill the tax return form of assessees and encourage voluntary compliance. The tax department also uses information from third parties to check with assessees whether their reported income has any inaccuracies, under the e-verification scheme. Tax payers now have the option to update their tax returns to account for any amount of tax that was not included in the reported income. 

 

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Updated: 28 May 2023, 09:22 PM IST

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