Quick Summary
The Income Tax Department has strengthened compliance requirements for Reporting of Specified Financial Transactions (SFT) under the Income Tax Act, 2025 and Rules, 2026. The latest framework aims to enhance transparency, widen the tax base, and track high-value financial activities across India. Issued by the Directorate of Income Tax (Intelligence Criminal Investigation), the updated guidelines mandate reporting entities to disclose specified transactions through structured forms such as For
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FAQ :
SFT refers to high-value financial transactions conducted by individuals or entities that designated reporting entities must report to the Income Tax Department. This includes transactions like large cash deposits, credit card payments, property purchases, and foreign exchange spending.
Entities involved in specified financial transactions must report them. This includes banks, companies, NBFCs, registrars, insurers, and others. They need to register on the reporting portal and obtain an ITDREIN.
Key categories include cash deposits/withdrawals in current/savings accounts exceeding certain thresholds, credit card payments over Rs 1 lakh, purchase of shares/bonds/property over Rs 10 lakh/Rs 45 lakh respectively, and foreign exchange spending over Rs 5-10 lakh.
For Form 98 (Non-PAN transactions), the due dates are 30th April and 31st October. For Form 165 (Specified Financial Transactions) and Form 166 (Reportable foreign accounts), the due date is 31st May.
Penalties include Rs 500 per day for delays, Rs 1,000 per day after a notice period, and a Rs 50,000 penalty for inaccurate reporting. Defects must be corrected within 10 days of self-identification or 30 days if detected by the department.
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