top of page

Tax Audit Assessee : Transactions to be reported by 31st May

The Income tax department has been recently considering various non intrusive measures to collect data on black money. The income tax department has been collecting data on certain specified financial transaction by requiring certain prescribed authorities to file an Annual Information Return.This requirement has been in force since 2004.

Following is a discussion on applicability of reporting of Specified Financial Transaction to tax audit assesses.

Rule 114E, which is the relevant Rules was amended by w.e.f 01-04-2016 to include Cash Receipts exceeding 2 lakh rupees for sale of any goods or service by any person who is liable for audit under section 44AB as a reportable transaction.Therefore all assessee who are liable for tax audit u/s 44AB are now required to file Statement of Financial Transaction in Form 61A.


Whether 2 lakhs limit is considered for each party individually or in total ?

The limit is applicable to each party separately from whom cash is received during the year. If any person has paid more than Rs 2 lakhs in cash for purchase of any goods or service then such transaction has to be reported.

Whether total cash received from a person during the year has to be considered in aggregate ?

No. Although Rule 114E amended w.e.f 01-04-2016 had originally stated that the limits applied to total cash received during the year in aggregate. However the Rules were again amended w.e.f 06-10-2016 vide Notification of CBDT 91/2016 whereby now only cash receipt in a single transaction will be considered.

What if cash is received in excess of Rs 2 lakhs against single sale or service but in various amounts less than 2 lakhs over a period of time ?

A reading of the sub-rule will reveal that receipts of over Rs 2 lakhs against a single transaction has to be reported. Therefore even if receipts are in amount less than Rs 2 lakhs if the total cash received against a single sale or services exceeds Rs 2 lakhs in aggregate then it has to be reported.

What information has to be furnished in Form61A, what details should I have in hand to submit the statement on Specified Financial Transaction ?

The report is filed under a separate ITDREIN generated after logging into The detail of sales, Name and Address of the Party, PAN. In case Form60 is submitted then such details and ID Proof submitted along with. Acknowledgement number of Form60 based on Form 61 e-filed.

The detailed handbook released by CBDT on ITDREIN_Registration and SFT_Report_Generation_Utility is attached for reference.

What are the due dates for filing the Statement ? and what about the consequence of not filing the statement in time ?

Form 61A has to be filed by 31st May after the end of every financial year.Delay in filing the Form will attract penalty @ Rs 100 per day of delay. Penalty for filing incorrect particulars or not correcting it after knowing of such defect is Rs 50,000.