Compliance Obligations and PAN Requirements for Financial Transactions
This outreach program by the Directorate of Income Tax in Nagpur, in collaboration with the Nagpur Branch of WIRC of ICAI, focuses on effective compliance with Statement of Financial Transactions (SFT). It covers PAN compliance obligations, forms, and penalties for non-compliance related to specified financial transactions. The program emphasizes the importance of quoting PAN in all transaction documents and the responsibilities of both individuals and banks. Form 60, verification requirements, and filing obligations are also highlighted.
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Presentation Transcript
Outreach Outreach Programme By Programme By Directorate Directorate of Income Tax(I&CI), Nagpur of Income Tax(I&CI), Nagpur in collaboration in collaboration with Nagpur Branch of WIRC of Nagpur Branch of WIRC of ICAI with ICAI On Effective SFT Compliance In respect of SFT - 16 Date: 13.05.2023
Scheme of Presentation Scheme of Presentation PAN Compliance Obligation Form Compliance by Co-op. Banks 61 & Form 61A/SFT Reporting of interest Income (SFT- 16) Interconnectivity of SFT compliance & Verification Scheme
PAN Compliance PAN Compliance PAN Compliance Obligation On Whom Person entering into Entity connected With the specified the Specified Financial Transaction Financial Transaction Rule 114B
Form 60 Compliance Form 60 Compliance Rule 114B Specifies some transactions for which it is mandatory to provide PAN or Form 60. The specified transaction related to Bank & SROs are as below: Opening of Bank A/c or demat a/c, 1. Issue of credit & Debit Card 2. Cash Deposit, purchase of Bank Draft/pay order or banker s cheque exceeding 50K in a single day 3. Time deposit exceeding 50K or aggregating to 5 lac during a FY 4.
Obligation of Person who enter Obligation of Person who enters s into Transaction Transactions s into Specified Specified To quote PAN in all documents pertaining to such transactions. {Sec. 139A(1)(vii)} If PAN is not available, make a declaration in Form No.60 giving therein the particulars of such transaction. (2nd Proviso to Rule 114B) If fail to do so, he/she shall be liable for Penalty of Rs. 10,000/- for each default u/s 272B(2/2A) of the Income-tax Act.
Obligation Obligation of Bank S Specified pecified Transaction To ensure that the PAN has been duly quoted in that document(s) pertaining to specified transaction {Sec. 139A(6)} of Bank in Transaction in respect respect of of To ensure after verification that PAN or particulars of Form 60 has been duly finished. (Rule 114C) Furnish a statement in Form No. 61 containing particulars of declaration of Form 60 (Rule 114D) Retain Form 60 for a period of 6 Years If fails to comply with section 139A(6), penalty of Rs. 10,000 shall be imposed u/s 272B(2B).
Contd Contd Due Date of filing of Form 61: i) 31st of October: Where the declaration in form 60 received by 30th September. ii) 30th of April: Where the declaration in form 60 received by 31st March.
SFT Compli SFT Complia ance (Form 61A) nce (Form 61A) Rule 114E specify some transactions for which SFTs are to be filed in Form 61A. The transactions for which SFT(s) have to be filed by Bank & SRO are as below: Purchase of bank, drafts, Pay orders or banker's cheque & pre-paid instruments in cash an amount aggregating to 10 lac rupees or more in a FY. i) Cash deposits or cash withdrawal aggregating to 50 lac rupees or more for current a/c & 10 lac for other than current a/c in a financial year in one or more current a/cs. ii) TD of a person aggregating to 10 lakh rupees or more in a financial year of a person. iii)
SFT Compli SFT Complia ance (Form 61A) nce (Form 61A) Cont d Cont d Rule 114E specify some transactions for which SFTs are to be filed in Form 61A. The transactions for which SFT(s) have to be filed by Bank are as below: (iv)Payment of Credit card more than 10 lac in a FY (v) Interest paid
Contd Contd The above transactions has been categorized under different SFT Codes by DG(System). The SFT which is applicable to bank are as under: SFT Code Nature of transaction & monetary limit of reportability SFT - 01 SFT - 02 SFT - 03 SFT - 04 SFT - 05 SFT - 06 SFT - 16 Purchase of Bank drafts or pay order in cash - > 10 lac in FY Purchase of pre-paid Instrument in cash - 10 lac in a FY Cash Deposit in Current a/c - 50 lac in a FY Cash Deposit in other than Current a/c - 10 lac in a FY Time deposit - 10 lac in a FY Payment of Credit Card Bill - 10 lac in a FY Any interest Income
Obligation of Bank in respect of SFT Obligation of Bank in respect of SFT To furnish a statement in respect of specified financial transaction of Rule 114E in Form No. 61A. {Sec. 285BA(1)} Statement should be error free and filed within time {Sec. 285BA(2)} Due date of filing On or before 31st May of following FY If fails to furnish SFT, the penalty of Rs. 500 or 1000 per day shall be impose {Sec. 271FA} If furnish inaccurate statement then penalty of Rs. 50000 shall be imposed {Sec. 271FAA}
SFT SFT- -16 (Interest Income) 16 (Interest Income) Sub rule 5A of rule 114E specifies that SFT is to be filed in respect of Interest Income. Information of interest is to be reported for all account/deposit holder where interest exceeds zero per account excluding Jan Dhan Account. Interest which is exempted from Income-tax viz. PPF, Sukanuya Samrudhi a/c, Foreign Currency Non-resident a/c etc. need not to be reported. Deduction of 80TTA should not be reduced from gross interest In case of Minor, Interest should be reported in the name of legal Guardian Separate report is required to be submitted for each type of a/c In case of same type of two or more a/cs, interest should be aggregated
Responsibility of RE in e Responsibility of RE in e- -V scheme V scheme There is interconnection between Reporting compliance and e- Verification scheme. Correctness of SFT data of primary importance for e-Verification Scheme - 2021 SFT compliance coupled with e-Verification achieves the objective of widening and deepening of taxpayer base Prompt response from SFT filers during e-Verification is crucial for success of e-Verification
. Thank You Thank You
