Widening the scope of Statement of Financial Transactions (SFT)
Existing provisions of section 285BA of the Act, inter alia, provide for furnishing of statement of financial transaction (SFT) or reportable account by person specified therein.
In order to enable pre-filling of return of income, it is proposed to obtain information by widening the scope of furnishing of statement of financial transactions by mandating furnishing of statement by certain prescribed persons other than those who are currently furnishing the same. It is also proposed to remove the current threshold of rupees fifty thousand on agragate value of transactions during a financial year, for furnishing of information, with a view to ensure pre-filling of information relating to small amount of transactions as well. In order to ensure proper compliance, it is also proposed to amend the provisions of sub-section (4) of aforesaid section so as provide that if the defect in the statement is not rectified within the time specified therein, the provisions of the Act shall apply as if such person had furnished inaccurate information in the statement.
Consequently, it is also proposed to amend the penalty provisions contained in section 271FAA so as to ensure correct furnishing of information in the SFT and widen the scope of penalty to cover all the reporting entities under section 285BA .
These amendments will take effect from 1st day of September, 2019.
[Clauses 63 & 66]
Amendment of section 271FAA.
Clause 63 of Finance Bill 2019
63. In section 271FAA of the Income-tax Act, in the opening portion, the words, brackets and letter “clause (k) of” shall be omitted with effect from the 1st day of September, 2019.
Amendment of section 285BA.
66. In section 285BA of the Income-tax Act, with effect from the 1st day of September, 2019,–– (i) in sub-section (1), for clause (k), the following clauses shall be substituted, namely:––
“(k) a prescribed reporting financial institution; or
(l) a person, other than those referred to in clauses (a) to (k), as may be prescribed,”;
(ii) in sub-section (3), the second proviso shall be omitted;
(iii) in sub-section (4), for the words “such statement shall be treated as an invalid statement and the provisions of this Act shall apply as if such person had failed to furnish the statement”, the words “the provisions of this Act shall apply as if such person had furnished inaccurate information in the statement” shall be substituted.