DGIT(S)/ADG(S)-2/Reporting Portal/2021/180
                                                                                   Government of India
                                                                                    Ministry of Finance
                                                                               Central Board of Direct Taxes
                                                                        Directorate of Income Tax (Systems)
                                                                             

                                                                                Notification No. 3 of 2021
                                                                                                                                                              New Delhi, 30th April, 2021
                 Format, Procedure and Guidelines for submission of Statement of Financial Transactions (SFT) for Depository Transactions
               Section 285BA of the Income Tax Act, 1961 and Rule 114E requires specified reporting persons to furnish statement of financial transaction (SFT).

2.                   For the purposes of pre-filling the return of income, CBDT has issued Notification No. 16/2021 dated 12.03.2021 to include reporting of information relating to Capital gains on transfer of listed securities or units of Mutual Funds. The new sub rule 5A of rule 114E specifies that the information shall be furnished in such form, at such frequency, and in such manner, as may be specified by the Director General of Income Tax (Systems), with the approval of the Board.

3.                    The guidelines for preparation and submission of Statement of Financial Transactions (SFT) information are enclosed in Annexure A and Annexure B respectively. The format of control statement to be submitted by the Designated Director is given in Annexure C. The data structure and validation rules are enclosed in Annexure D and Annexure E respectively. Notification No. 3 of 2018 dated 05.04.2018 may be referred for the procedure for registration.

4.                     All Depositories as defined in clause (e) of sub-section (1) of section 2 of the Depositories Act, 1996(22 of 1996) are required to prepare the data file in prescribed format from their internal system. Reporting entities are required to submit the data files using SFTP Server using the login credentials (To be communicated separately).

5.                  A separate control statement (refer annexure C) is required to be signed, verified and furnished by the Designated Director.

6.                 The statement of financial transactions relating to Financial Year 2020-21 shall be furnished on or before the 31st May 2021. Thereafter, the statement of financial transactions relating to the quarter ending 30th June, 31st September, 31st December and 31st March shall be furnished on or before 25th of July, October, January and April respectively.

7.                 The reporting entities are also required to provide information reported to Income Tax Department, to the account holder which will enable taxpayers to reconcile the information displayed in the Annual Information Statement (AIS) (Form 26AS).