SFT Report - Issue of shares

As per Rule 114E of the Income Tax Rules, if a company issues shares (including share capital and share premium) aggregating to ₹10 lakhs or more to a person in a financial year, it must be reported under Form 61A – SFT-005.

• Transaction Type: Receipt from any person for acquiring shares issued by the company.

• Threshold: More than ₹10 lakhs in a financial year.

• Reporting Person: The company issuing the shares.

• SFT Code: SFT-005

• Form Used: Form 61A

• Reporting Portal: https://report.insight.gov.in/

You will need to prepare and submit the XML file using the prescribed utility available on the portal, signed with a valid DSC.

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SFT for share issue:

• Rule 114E (SFT-008 / item 5): a company issuing shares must report receipts from any person of Rs 10 lakh or more in aggregate in a FY, for acquiring shares (including share application money).

• File Form 61A on the e-filing portal (Reporting Portal) by 31 May following the FY. Register the "Reporting Entity" and designated director/principal officer, and get an ITDREIN first.

• Report each person's PAN, name, aggregate amount and transaction details. The data flows into the subscriber's AIS.

• If no reportable transactions: a nil SFT is not mandatory (but recommended if the department has sent notices).

• Late filing: penalty Rs 500 per day (Rs 1,000 after a notice) under Sec 271FA. Inaccurate information: Rs 50,000 (Sec 271FAA).

• Also ensure PAS-3 within 30 days and the Sec 68 trail (identity, creditworthiness, bank route) for the share money.