Form 61A - Purpose, Transactions Reported, Components, Penalty

Introduction

In the era of digital transparency, the Income Tax Department has tightened its grip on tax evasion significantly. One of the most powerful tools in their arsenal is the Statement of Financial Transactions (SFT), commonly filed via Form 61A.

Many taxpayers are surprised when they receive a notice regarding a high-value transaction they made, such as buying a luxury car, investing in mutual funds, or depositing cash, and ask why it wasn't reflected in their Income Tax Return. The source of this information is Form 61A. This form is essentially a "tattletale" document filed by banks, companies, and registrars that alerts the government about significant financial activities.

For reporting entities, filing this form correctly is a statutory obligation. For taxpayers, understanding it is crucial to ensure your reported income matches your lifestyle and investments. In this guide, we decode the purpose, components, and strict penalty clauses associated with Form 61A.

Table of Contents

1. What is Form 61A?
2. Who is Required to File Form 61A?
3. List of Transactions Reported (SFT) & Thresholds
4. Components of Form 61A
5. Due Date for Filing
6. Penalties for Non-Compliance
7. How to File Form 61A Online
8. FAQs

What is Form 61A?

Form 61A is a statement used to furnish details of Specified Financial Transactions (SFTs) to the Income Tax Department. It was introduced under Section 285BA of the Income Tax Act, 1961, read with Rule 114E.

The primary objective of this form is to curb black money and widen the tax base. By mandating financial institutions and other entities to report high-value transactions, the government can cross-verify these spends against the income declared by the taxpayer in their ITR. If a taxpayer declares an income of ₹5 Lakh but buys a property worth ₹50 Lakh, Form 61A is what flags the discrepancy.

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Who is Required to File Form 61A?

The responsibility to file Form 61A lies with "Reporting Entities." It is not filed by the individual taxpayer who makes the transaction, but by the organization that facilitates it.

Common Reporting Entities include:

• Banking Companies and Co-operative Banks.
• Non-Banking Financial Companies (NBFCs).
• Post Master General (Post Offices).
• Companies issuing shares, bonds, or debentures.
• Mutual Fund Trustees.
• Registrars or Sub-Registrars (for property deals).
• Foreign Exchange Dealers.

List of Transactions Reported (SFT) & Thresholds

Not every transaction is reported. Only those that cross a specific "High-Value" threshold in a financial year must be reported in Form 61A.

Here is a simplified table of the key transactions and their limits:

Nature of Transaction

Reporting Entity

Threshold Limit (Aggregate per FY)

Cash Deposits (Savings Account)

Banks / Post Offices

₹10 Lakh or more in a financial year.

Cash Deposits / Withdrawals (Current A/c)

Banks

₹50 Lakh or more in a financial year.

Fixed Deposits (Time Deposits)

Banks / Post Offices / NBFCs

₹10 Lakh or more (excluding renewals).

Credit Card Payments

Card Issuing Banks

₹1 Lakh or more in Cash OR ₹10 Lakh or more by any other mode.

Purchase of Shares / Bonds / Debentures

Issuing Company

₹10 Lakh or more.

Purchase of Mutual Fund Units

Mutual Fund Trustees

₹10 Lakh or more.

Purchase/Sale of Immovable Property

Registrar / Sub-Registrar

Stamp Duty Value of ₹30 Lakh or more.

Sale of Foreign Currency

Authorized Dealers

₹10 Lakh or more.

Cash Payment for Goods/Services

Businesses liable for Tax Audit

₹2 Lakh or more per transaction.

Did You Know?

The Income Tax Department uses Artificial Intelligence to match data from Form 61A directly with your Form 26AS and Annual Information Statement (AIS). Before filing your ITR, always check your AIS to see what high-value transactions have been reported against your PAN.

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Components of Form 61A

Form 61A is a structured XML-based document divided into four distinct parts, ensuring detailed classification of data.

• Part A: Statement Level Information

This section captures the general details of the Reporting Entity, such as Name, PAN, Address, and the type of statement (Original or Replacement).

• Part B: Person-Based Reporting

Used when the transaction is linked to a specific person but not necessarily a bank account. For example, a person purchasing heavy machinery in cash or buying foreign currency.

• Part C: Account-Based Reporting

This is the most common section. It details transactions linked to specific bank accounts, such as cash deposits in savings or current accounts, or fixed deposits. It captures the Account Number, Type, and Account Holder’s details.

• Part D: Immovable Property Transactions

Used specifically by Registrars to report details of property buyers and sellers involved in deals exceeding ₹30 Lakh.

Due Date for Filing

For every financial year, the due date for filing Form 61A is 31st May of the following financial year.

• Example: For Financial Year 2024-25 (April 1, 2024, to March 31, 2025), the due date to file Form 61A is May 31, 2025.

Note: The department rarely extends this deadline, given its critical role in pre-filling ITR forms for taxpayers.

Penalties for Non-Compliance

The Income Tax Act imposes strict penalties on Reporting Entities that fail to file Form 61A or file it with errors. These are governed by Section 271FA and Section 271FAA.

1. Penalty for Late Filing (Section 271FA)

• Initial Default: If the return is not filed by May 31st, a penalty of ₹500 per day is levied for every day of delay.
• After Notice: If the Income Tax Authority issues a notice demanding the filing and the entity still fails to comply, the penalty increases to ₹1,000 per day from the date specified in the notice.

2. Penalty for Inaccurate Information (Section 271FAA)

If a Reporting Entity provides inaccurate information in Form 61A, a penalty of ₹50,000 can be levied. This applies if:

• The error was deliberate.
• The entity discovered the error later but failed to inform the tax authorities within 10 days.
• The entity failed to follow due diligence procedures.

Also read: Types of ITR forms and eligibility for FY 2025-26

How to File Form 61A Online

Filing Form 61A is a technical process involving the generation of an XML file.

1. Registration: The reporting entity must register on the Income Tax E-filing portal under "Reporting Portal" using their TAN/PAN.
2. ITDREIN Generation: An Income Tax Department Reporting Entity Identification Number (ITDREIN) is generated.
3. Data Preparation: The entity must collate all transaction data and use the Report Generation Utility (RGU) provided by the department to convert this data into a valid XML file.
4. Digital Signature: The XML file must be signed using a Digital Signature Certificate (DSC) of the designated director or principal officer.
5. Upload: Log in to the Reporting Portal and upload the XML file.
6. Acknowledgement: Upon successful validation, an acknowledgement receipt is generated.