Understanding What is Statement of Financial Transaction (SFT), Who is Required to File

Understanding What is Statement of Financial Transaction (SFT), Who is Required to File

To keep an eye on large financial transactions made by taxpayers, the Income-tax Law has developed the Statement of Financial Transaction (SFT) or Reportable Account. This system assists tax authorities collect details about certain high-value transactions that people carry out during the year.

Some specific organizations or people (which we’ll talk about later) are required to file this statement. In the statement, they must report details of certain big financial transactions or accounts they have handled during the year.

With this information, the Income-tax Department can track important transactions made by individuals or businesses. In the following sections, you’ll learn more about the rules and requirements related to these statements and who has to file them.

According to Section 285BA of the Income Tax Act, 1961, certain institutions (called Filers) must file a statement of financial transactions or reportable accounts (SFT). This statement includes details of specific financial activities or accounts that they have recorded or handled during the financial year. The statement must be submitted to the Income Tax Department or another authority as prescribed.

Due Date to File SFT

The statement shall be furnished on or before 31st May immediately following the financial year in which the transaction is registered or recorded.

This means for Financial Year 2024-25, the SFT has to be filed before 31st May 2025.