The Income Tax Department requires certain entities—banks, NBFCs, mutual funds, registrars, and sometimes even individuals—to report specified high-value financial transactions through Form 61A (Statement of Financial Transactions or SFT). For Chartered Accountants, ensuring accurate filing of Form 61A is crucial, as non-compliance attracts heavy penalties and often results in clients being flagged under Annual Information Statement (AIS) or Form 26AS mismatches.

What is Form 61A?

Form 61A is a reporting mechanism under Section 285BA of the Income Tax Act. It requires “reporting entities” to submit details of specified high-value financial transactions carried out during a financial year. This ensures that the tax authorities can track unreported income and cash movement effectively.

Who Needs to File Form 61A?

Form 61A is mandatory for the following reporting persons/entities:

• Banks and Post Offices – for cash deposits, withdrawals, or term deposits beyond threshold limits.

• Companies/Institutions issuing shares, debentures, bonds, or mutual fund units.

• Registrars/Sub-registrars – for purchase/sale of immovable property.

• Individuals or Businesses – if specified transactions (like high-value cash payments for goods/services) are carried out.

CAs must confirm whether their client qualifies as a reporting entity.

Transactions to be Reported in Form 61A (Key SFT Categories)

1. Cash deposits/withdrawals exceeding ₹10 lakh in savings/current accounts.

2. Time deposits of more than ₹10 lakh in a financial year.

3. Purchase of shares, bonds, debentures, mutual funds above ₹10 lakh.

4. Credit card payments exceeding:

   • ₹10 lakh (cash), or

   • ₹1 lakh (any mode of payment).

5. Purchase/sale of immovable property valued at ₹30 lakh or more.

6. Cash payment for goods/services exceeding ₹2 lakh.

7. Any other notified transactions under Rule 114E.

Due Date for Filing Form 61A

• 31st May following the financial year in which the transaction occurred.

• Example: For FY 2024–25, the due date is 31st May 2025.

Step-by-Step Process for Filing Form 61A

1. Prepare Data: Collect and validate details of transactions, ensuring PANs and amounts match client books.

2. Generate XML: Use the ITD’s Reporting Entity Identification Number (REIN) registration and Reporting Portal utility.

3. Login: Access the Reporting Portal via the Income Tax e-Filing site.

4. Upload Statement: Submit XML file with digital signature (DSC).

5. Acknowledgment: Download and store for compliance records.

Penalties for Non-Compliance

• Late filing: ₹500 per day of delay (before notice), ₹1,000 per day after notice.

• Incorrect information: Penalty up to ₹50,000 under Section 271FA.

• Failure to file: Heavier fines plus risk of scrutiny for both entity and reported clients.

CA’s Checklist for Form 61A Filing

• Verify PAN and transaction details before filing.

• Ensure data format (XML) and digital signing are correct.

• Cross-check that reported transactions align with AIS/Form 26AS.

• Maintain backup of source documents (cash vouchers, property documents, investment slips).

• Educate clients about threshold limits to avoid repeated red flags.

Common Errors and How CAs Can Prevent Them

• PAN Mismatch → Validate PANs against ITD database.

• Double reporting of same transaction → Use reconciliation tools.

• Late filing due to poor data collation → Build periodic compliance calendar.

• Wrong SFT code selection → Use Rule 114E codes carefully.

Form 61A compliance is non-negotiable for reporting entities and requires meticulous data collection, validation, and timely filing. Chartered Accountants not only ensure smooth compliance but also safeguard clients against penalties and tax scrutiny by proactively monitoring SFT-triggering transactions.