SFT Filling Form 61A - Any cap on Penalty or Condolence

Hi Bhumit,

Regarding the SFT (Statement of Financial Transactions) filing under Section 285BA (Form 61A) and penalties for late filing:

Penalty under Section 271FA for SFT non-compliance:

• The Income Tax Act prescribes a penalty of ₹500 per day for each day of default.

• After 30 days, the penalty increases to ₹1000 per day.

• There is no specific upper limit or cap mentioned in the law on this penalty.

• So, theoretically, the penalty can accumulate indefinitely.

But what about condonation or relief?

• The penalty is discretionary and can be waived or reduced if you appeal and demonstrate reasonable cause or genuine difficulties.

• Courts and tribunals have, in some cases, granted relief if the delay was unintentional and steps were taken to comply promptly after discovering the lapse.

• You can apply for condonation of delay or file an appeal against the penalty demand, explaining your situation.

• Since it’s a family-only rights issue, and the amount of shares involved might be small, this might support your case.

What should you do now?

1. File the pending SFT (Form 61A) immediately — even delayed filing may help reduce the penalty burden.

2. Approach the Assessing Officer or CPC with a request for condonation of delay.

3. Get professional help to draft a representation explaining the reasons for the delay.

4. Keep evidence of the genuine steps taken and reasons why the delay was unavoidable.

Summary:

• Penalty can be huge without any fixed cap.

• Relief/condonation possible on merits — not automatic, but worth trying.

• Immediate action to file and represent can help.