Statement of Financial Transactions (SFT) Filing
In short
A Statement of Financial Transactions (SFT) is an annual report that specified entities file with the Income Tax Department listing high-value transactions with their customers, such as large cash deposits, share issues, mutual fund investments and property deals. The statement has been filed in Form 61A by 31 May after the end of the financial year. The reported details appear in each customer's Annual Information Statement (AIS).
- Applicability review against the current thresholds
- Reporting entity registration and ITDREIN set-up
- Preparation, validation and filing of the statement
Overview
SFT is how the tax department learns about high-value transactions without waiting for taxpayers to disclose them. Banks, companies, mutual funds, property registrars and certain businesses report what they received or paid, and the department matches it against income tax returns.
It matters to new and growing companies too. A company that receives ₹10 lakh or more from a person during the year for the issue of shares, including share application money, has to report it, and so does a business whose accounts are audited that receives cash above ₹2 lakh for goods or services.
India's new Income-tax Act, 2025 has replaced the Income-tax Act, 1961 from 1 April 2026. The SFT requirement continues, but section numbers, form references and some details may change, so we apply the rules in force for the year being reported.
Key requirements
- Banks and co-operative banks: cash deposits or withdrawals of ₹50 lakh or more in a year in current accounts, cash deposits of ₹10 lakh or more in other accounts, and time deposits of ₹10 lakh or more
- Card issuers: credit card bill payments of ₹1 lakh or more in cash, or ₹10 lakh or more by any mode, in a year
- Companies: receipts of ₹10 lakh or more from a person for issue of shares, bonds or debentures, and listed companies buying back shares worth ₹10 lakh or more
- Mutual funds: receipts of ₹10 lakh or more from a person for units
- Authorised dealers: sale of foreign currency of ₹10 lakh or more to a person
- Property registrars: purchase or sale of immovable property for ₹30 lakh or more, or valued at that amount for stamp duty
- Businesses whose accounts must be audited: cash receipts above ₹2 lakh for the sale of goods or services
Documents required
- Income tax reporting portal login and the entity's ITDREIN (registration number as a reporting entity)
- Details of the designated director and principal officer
- Transaction data for the year: customer name, PAN, address and amounts
- Share allotment records and bank statements, for share-capital reporting
We share an exact checklist for your case before you start, since requirements vary with the structure and the people involved.
Process
Check applicability
We review the year's transactions against the reporting thresholds that apply to your type of entity.
Register the reporting entity
If needed, the entity is registered on the income tax reporting portal and the ITDREIN, designated director and principal officer are set up.
Prepare the statement
Transaction data is collected, PANs are validated and the statement is prepared in the prescribed format and validated with the department's utility.
File and respond
The statement is uploaded before the due date, and any defects the department reports are corrected.
What KNAP Advisory handles
- Applicability review against the current thresholds
- Reporting entity registration and ITDREIN set-up
- Preparation, validation and filing of the statement
- Correction statements for defects
- Help reconciling SFT data with customers' AIS queries
Frequently asked questions
What does SFT mean in income tax?
SFT stands for Statement of Financial Transactions (also called Statement of Specified Financial Transactions). It is a report that banks, companies, mutual funds, registrars and other specified entities file with the Income Tax Department about high-value transactions with their customers.
Who has to file an SFT?
Specified reporting entities: banks and co-operative banks, post offices, card issuers, companies issuing shares, bonds or debentures, listed companies buying back shares, mutual funds, authorised foreign exchange dealers, property registrars, and businesses whose accounts are audited that receive cash above ₹2 lakh for goods or services.
What is the due date for filing SFT?
The statement has been due by 31 May following the end of the financial year in which the transactions took place. We confirm the date under the rules in force each year.
What is the penalty for not filing SFT?
Under the Income-tax Act, 1961, failure to file attracted a penalty of ₹500 for each day of default, rising to ₹1,000 per day after a notice, and filing inaccurate information could attract a further penalty of ₹50,000. We check the corresponding provisions under the new Act for the year concerned.
Does a newly incorporated company need to file SFT?
Only if it has reportable transactions. The most common case is receiving ₹10 lakh or more from one person during the year for the issue of shares, including share application money.
How does SFT affect an individual taxpayer?
Transactions reported in an SFT appear in the individual's Annual Information Statement (AIS). If the income tax return does not reflect them, the department may raise a query or notice, so the return should be reconciled with the AIS before filing.