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SFT-005 Time deposit for 20L and 'O' under Remarks

Tax queries 1905 views 1 replies

While filling my ITR, I noticed that in Form 26AS I have around 20L shown under "SFT-005 Time deposit" and 'O' as Remarks, as shown below:

 

I have already disclosed ~1L as "Interest Income".

I do not have any other source of income and all the money in my bank account is from monthly deposits by my son for my livelihood and leisure expenses.

Do I need to worry about this "SFT-005 Time deposit"?

Do I need to do something for this while submitting ITR?

Do I need my son need to do something for this while submitting his ITR?

Replies (1)

Hi Mahesh! Here’s a simple breakdown of your situation with SFT-005 (Time Deposit) showing ₹20 lakh and remarks ‘O’ in Form 26AS:


What is SFT-005 in Form 26AS?

  • SFT-005 is a Statement of Financial Transaction reporting related to time deposits (FDs) aggregating to ₹10 lakh or more in a financial year.

  • Banks report the aggregate of all time deposits held by you during the year.


What does ‘O’ in Remarks mean?

  • 'O' generally means the transaction was reported but there is no discrepancy or outstanding issue flagged by the tax department at that time.

  • It does not mean a problem or tax demand.


Your case specifics:

  • You have ₹20 lakh shown as time deposits.

  • You have disclosed ₹1 lakh as interest income.

  • The money is from your son’s deposits for your expenses.

  • No other income sources.


Do you need to worry or take action?

  1. Disclosure in ITR:

    • You should report the interest income you actually earned (₹1 lakh) in the ITR under income from other sources.

    • You do not need to report the principal deposits (₹20 lakh) as income since deposits themselves are not taxable.

    • No need to report SFT separately; it's just an information return from banks.

  2. If the source of funds is legitimate:

    • Keep proof of funds gifted/transferred by your son (like bank statements or gift deeds).

    • No tax liability arises on receiving money from your son as gift.

  3. For your son:

    • If he gifted this money to you, he should mention this in his ITR if applicable, but generally, gifts to relatives (like parents) are exempt from gift tax.

    • No special disclosure is needed for gifting to close relatives, but he should maintain records for clarity if asked.


Summary:

  • No immediate action required on SFT-005 in Form 26AS.

  • Ensure interest income is reported correctly.

  • Maintain documentary evidence for the source of funds (son’s gift).

  • No worry unless the tax department sends any notice.



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