20481What problems are there with recycled mobile numbers?

There should be synergy in your earnings, expenses and taxes. If there is a mismatch in these three, then be prepared to face questions by tax authorities.

Statement of Specified Financial Transactions or SFT gives details of account of big expenses. If you make a fixed deposit of a large amount or you get a big interest from a savings plan or shares and profits in mutual funds – the I-T department will get to know it via SFT.

Difficult to hide transactions

Since individuals do not have to give details of expenses in the I-T returns, that is why they don’t reveal. But now it is not possible to do this because it will be given in your Form 26AS. Under section 114E of the Income Tax, the transactions will be submitted by the banks and financial institutions to the Income Tax Department till May 31. It may not be possible to shop for millions or get a hefty interest and pay only a miniscule interest as tax.

Purpose of SFT

The role of SFT is important as it seeks to prevent tax evasion. According to tax expert Gauri Chadha, through the SFT, the Income Tax Department confirms that the taxpayer is not hiding any information. If the earnings are less and the expenses are more visible then the income notice will come. If the taxpayer is not able to disclose the source of his income satisfactorily, it will be considered undisclosed income and he or she will have to pay tax along with penalty and interest.

Which transactions will come under SFT?

— Cash payment or deposit of more than 10 lakh in bank’s savings account

— Deposit or withdrawal of more than 50 lakh from the bank’s current account

— FD of more than 10 lakh

— Payment of more than 1 lakh with credit card

— Stamp value of more than 30 lakh has been bought or sold.

— Investment in Mutual Funds of more than 10 lakh

— Transactions of more than 10 lakh bonds, shares or debentures

— Transaction of foreign currency of more than 10 lakhs through traveller’s cheque, debit/credit card or currency card

By May 31 every year, financial institutions will share information about the past financial year in Form 61A. If the institutes do not submit the SFT on time, then they will have to pay a default fee of 500 rupees per day.

Banks, NBFCs, post offices, mutual fund houses, bond and share issuing companies, property registrars and foreign exchange companies have to prepare it every year.