Regarding Entry of SFT-005 in Form 26AS

Hello Navin,

Here’s some clarity on your concerns about the SFT-005 entry in Form 26AS related to your renewed Fixed Deposit (FDR/TDR):

1. Are renewed Fixed Deposits required to be reported as SFT-005?

• SFT-005 is the Statement of Financial Transactions reporting code used by banks for deposit transactions of Rs. 10 lakh or more in a financial year.

• Generally, only new deposits or deposits renewed with a fresh transaction exceeding Rs. 10 lakhs in the financial year are reportable.

• However, if you have renewed an FDR and the renewed amount (or fresh deposit made during renewal) exceeds Rs. 10 lakhs, banks are required to report that transaction under SFT-005.

• If the renewal is a mere extension without fresh money deposited, typically it should not be reported again.

So, if the bank has reported the renewal as SFT-005, it likely means they considered it a fresh deposit transaction exceeding the reporting threshold.

2. How to get the incorrect SFT-005 entry rectified?

• If you believe the bank incorrectly reported the renewed deposit as a fresh deposit, you should:

  • Contact the bank branch where the FDR is held.

  • Request them to verify the transaction details and correct the SFT report if it is indeed a renewal without fresh funds.

  • The bank can then rectify the details in their SFT report submitted to the Income Tax Department.

3. What formalities do you need to do?

• Write a formal letter or email to the bank requesting correction of the SFT-005 entry.

• Keep copies of all correspondence and your FDR renewal documents as proof.

• Follow up with the bank until they confirm correction and inform you when done.

• You can also check your Form 26AS periodically to confirm if the correction has reflected.

Additional Notes:

• SFT entries are used by the Income Tax Department to identify high-value transactions for tax compliance.

• Sometimes, banks take a conservative approach and report such renewals to avoid penalties.

• If the SFT is correctly reported, you don’t need to worry unless it leads to confusion in your tax filings.