Quick Summary
The Income Tax Department has introduced Draft Form No. 165, a comprehensive statement format for reporting Specified Financial Transactions (SFT) under Section 508(1) of the Income-tax Act, 2025. The draft form lays out detailed reporting requirements for financial institutions, reporting entities
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FAQ :
Draft Form No. 165 is a new structured reporting statement designed to capture granular transaction data across various categories, including person-based financial transactions, bank and post office accounts, and immovable property deals.
The form is expected to apply to reporting entities such as banks, financial institutions, post offices, registrars, property reporting authorities, and other notified entities.
It requires detailed information about reporting entities, individuals or entities involved in transactions (including PAN/Aadhaar), aggregate transaction amounts, account details for banks and post offices, and specifics on immovable property transactions.
It reflects a push towards data-driven tax administration, aiming to detect tax evasion more efficiently, improve compliance monitoring, enhance financial transparency, and strengthen risk assessment systems.
Institutions may need to upgrade their systems for data collection and validation, while taxpayers involved in high-value transactions could face increased scrutiny due to the enhanced reporting granularity.
No, the form is currently in draft stage, and stakeholders may provide feedback before it is finalised and becomes a key compliance document under the Income-tax Act, 2025.
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