Statement of Financial Transactions (SFT): High-Value Transaction Reporting

Every large transaction you make through a bank, a mutual fund, a property registrar, or a company is more visible to the Income Tax Department than most people assume, not through some new surveillance tool but through a decades-old reporting mechanism called the Statement of Financial Transaction, filed as Form 61A. Understanding what gets reported, by whom, and at what threshold is useful both for compliance planning and for making sense of the entries you see in your Annual Information Statement (AIS) every year.

What the SFT Actually Is

Under Section 285BA of the Income Tax Act, certain "specified persons", banks, post offices, registrars of companies, sub-registrars handling property transactions, mutual fund houses, companies issuing shares, and similar institutions, are legally required to report specified high-value financial transactions carried out by their customers to the Income Tax Department. This obligation exists independently of whether the customer has done anything wrong; it is a structural data-collection mechanism, not an accusation.

The reporting entity files Form 61A (annually, or half-yearly for transactions in listed securities and mutual fund units) with the tax authorities. The individual or business whose transaction is reported has no filing obligation themselves in the overwhelming majority of cases; the burden sits entirely with the institution.

The High-Value Transaction Thresholds

The specific transactions and thresholds that trigger SFT reporting include, among others:

• Cash deposits aggregating Rs 10 lakh or more in one or more savings bank accounts in a financial year.
• Cash deposits or withdrawals aggregating Rs 50 lakh or more in one or more current accounts in a financial year.
• Term deposits (other than renewals) aggregating Rs 10 lakh or more in a financial year.
• Purchase of shares, mutual fund units, debentures, or bonds aggregating Rs 10 lakh or more in a financial year.
• Purchase or sale of immovable property valued at Rs 30 lakh or more.
• Credit card payments aggregating Rs 1 lakh or more in cash, or Rs 10 lakh or more by any other mode, in a financial year.
• Foreign currency transactions aggregating Rs 2 lakh or more (such as through a foreign currency card or forex purchase).

These figures reflect the thresholds most commonly cited across current guidance; thresholds and the list of reportable transaction categories are set out in the rules under Section 285BA and are periodically updated, so it is worth confirming the current figures with your CA rather than assuming they are permanently fixed, particularly around the transition to the Income Tax Act 2025.

Where SFT Data Ends Up: Your AIS

The reason SFT reporting matters directly to individual taxpayers, even though they never file the form themselves, is that every transaction reported against a PAN feeds into that person's Annual Information Statement on the income tax e-filing portal. If you sold a property for Rs 40 lakh, deposited Rs 12 lakh in cash across the year, or bought mutual fund units worth Rs 15 lakh, all of that shows up as line items in your AIS well before you sit down to file your return. For a closer look at how AIS compares with the older Form 26AS and how the two should be reconciled before filing, see our companion guide on AIS vs Form 26AS.

This is precisely why SFT-driven mismatches are one of the more common triggers for a Section 143(1) intimation or a scrutiny notice: if a high-value property purchase or a large cash deposit does not line up with the income and sources you have disclosed in your ITR, the system flags the gap automatically, long before a human officer looks at the file.

What Happens If the Reporting Entity Gets It Wrong (or Doesn't File)

The consequences of a missed or inaccurate SFT filing fall on the reporting entity, not the taxpayer. A bank, registrar, or company that fails to furnish the statement by the due date faces a penalty computed per day of continuing default, and a separate, generally larger penalty applies if the entity furnishes inaccurate information in the statement. None of this changes the taxpayer's own obligation to accurately disclose the underlying transaction in their return; a reporting entity's error does not excuse an individual from reporting the correct income or transaction themselves.

What This Means for You as a Taxpayer

• Assume any transaction crossing the thresholds above is visible to the department; there is no practical way to keep it off the radar, nor should there be a reason to try.
• Check your AIS every year before filing, not after receiving a notice. Entries that do not belong to you, or that appear duplicated, can be disputed through the AIS feedback mechanism.
• Make sure large transactions (property sales, big mutual fund redemptions, sizeable cash movements) are properly reflected in the corresponding year's ITR, with a consistent, explainable source of funds.
• If you are a business or institution that qualifies as a reporting entity yourself, treat the Form 61A filing deadline as seriously as any other statutory compliance date; the per-day penalty for default adds up quickly.

SFT reporting is not something to be alarmed by, it is simply the data layer that increasingly underpins how the Income Tax Department cross-checks returns. Treating your AIS as a pre-filing checklist rather than a post-notice surprise is the single most effective way to stay ahead of it. Our tax advisory services include AIS reconciliation and return preparation that accounts for exactly this kind of third-party reporting.