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

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.