Format, Procedure and Guidelines for submission of Statement of Financial Transactions (SFT) for Dividend income


Quick Summary
This notification from the Central Board of Direct Taxes (CBDT) outlines the format, procedure, and guidelines for submitting the Statement of Financial Transactions (SFT) specifically for dividend income. It details the requirements for reporting entities, including how to prepare and submit the data file, validation rules, and the submission deadline of 31st May following the financial year. An Excel-based utility is available to assist smaller entities.

Government of India
Ministry of Finance
Central Board of Direct Taxes
Directorate of Income Tax (Systems)
Notification No. 1 of 2021
New Delhi,20 April, 2021


  Format, Procedure and Guidelines for submission of Statement of Financial Transactions (SFT) for Dividend income

Section 285BA of the Income Tax Act, 1961 and Rule 114E requiresspecified reporting persons
to furnish statement of financial transaction (SFT).  

2. For the purposes of pre­filling the return of income, CBDT has issued Notification No.\16/2021 dated 12.03.2021 to include reporting of information relating to dividend income.The new sub rule 5A of rule 114E specifies that the information shall be furnished in suchform, at such frequency, and in such manner, as may be specified by the Director General of Income Tax (Systems), with the approval of the Board.  

3. The guidelines for preparation and submission of Statement of Financial Transactions(SFT) information are enclosed in Annexure A and Annexure B respectively.The data structure and validation rules are enclosed in Annexure C and Annexure D respectively. Notification No. 3 of 2018 Dated 5.04.2018 may be referred for the procedure for registration. 4. Reporting entities are required to prepare the data file in prescribed format from their internal system. An excel based report preparation utility has also been provided to assistsmall reporting entities in preparing data file. The data files prepared by internal system/report preparation utility should be validated using Text File Validator/SubmissionUtility. After validation, the text file is required to be compressed, encrypted and signed using the Text File Submission Utility before uploading on the reporting portal(https://report.insight.gov.in/). Reporting entities, having large number of data files, can also submit the data files using SFTP Server (specific request may be made for SFTP upload).

5. The statement of financial transactions shall be furnished on or before the 31 st May, immediately following the financial year in which the transaction is registered or recorded.   

6. The statement of financial transaction shall be signed, verified and furnished by thespecified Designated Director. Where the reporting person is a non­resident, the statementmay be signed, verified and furnished by a person who holds a valid power of attorney fromsuch Designated Director. The data files are required to be uploaded at the reporting portal through the login credentials (PAN and password) of the designated director.  

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FAQ :

This notification provides the format, procedure, and guidelines for specified reporting persons to submit a Statement of Financial Transactions (SFT) concerning dividend income, as required by Section 285BA of the Income Tax Act, 1961.

The statement of financial transactions must be furnished on or before the 31st May immediately following the financial year in which the transaction is registered or recorded.

Reporting entities are required to prepare the data file in the prescribed format using their internal systems or an Excel-based report preparation utility provided. The file must then be validated, compressed, encrypted, and signed using the Text File Submission Utility before uploading.

The data files should be uploaded on the reporting portal at https://report.insight.gov.in/ using the login credentials (PAN and password) of the designated director.

The statement must be signed, verified, and furnished by the specified Designated Director. If the reporting person is a non-resident, a person with a valid power of attorney from the Designated Director can sign and verify it.

 



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Finance news reporter covering taxation, GST, income tax, business compliance, and economy updates. I simplify complex financial topics into easy-to-understand articles for professionals, taxpayers, and business owners on leading finance and tax platforms.

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