Each year, the Income Tax Department gathers detailed financial information to track high-value transactions and ensure transparency in the financial system. One of the key mechanisms for this is SFT filing, short for Specified Financial Transactions. If you're a business owner, professional, financial institution, or even an individual entering large transactions, it’s essential to know what SFT is, who needs to file it, and how it affects your tax compliance.

In this blog, we simplify the essentials of SFT filing so you stay compliant — and avoid penalties.

What is SFT?

SFT refers to a list of high-value transactions that certain entities (called “reporting persons”) are required to report to the Income Tax Department. This helps the tax authorities cross-check income and ensure accurate tax returns.

These transactions are specified under Rule 114E of the Income Tax Rules, and reported via Form 61A.

Who Needs to File SFT?

SFT is generally required to be filed by:

• Banks, Co-operative banks, NBFCs

• Mutual Funds, Registrars & Share Transfer Agents

• Post offices

• Companies issuing bonds/debentures

• Companies issuing shares (including buybacks)

• Corporates paying dividends

• Cash handlers like jewelry traders, real estate developers, etc.

Even individuals or professionals may need to file if they’re engaging in large cash transactions.

Common Transactions Reported Under SFT

Here are some examples of reportable transactions and the thresholds beyond which they must be reported:

When is SFT Filing Due?

SFT must be filed by 31st May following the end of the financial year in which the transaction occurred. For FY 2024-25, the deadline is 31st May 2025.

How is SFT Filed?

SFT filing is done online using Form 61A through the Reporting Portal of the Income Tax Department.

Steps:

1. Register as a “Reporting Entity” on the Reporting Portal.

2. Prepare Form 61A (using validation utility or XML schema).

3. Upload it using your digital signature.

4. Track the status and respond to validation errors, if any.

What If You Don’t File SFT?

Failure to file SFT or providing inaccurate information can lead to penalties:

• ₹500 per day for delay in filing.

• ₹1,000 per day if notice is issued by the tax department and still not complied.

• Penal provisions under Section 271FA of the Income Tax Act.

More importantly, non-reporting may also trigger scrutiny assessments if your reported income doesn’t match your actual financial behavior.

Why It Matters

SFT is not just for large corporates. With rising digital payments and easier access to investment products, even salaried individuals and professionals may end up in the SFT radar.

Tax Tip from Bloomtree: Always match your ITR with AIS (Annual Information Statement) data to avoid notices. If you've made high-value transactions this year, check whether you (or your financial institution) are responsible for SFT filing.

Need Help with SFT Compliance?

At Bloomtree, we help individuals, professionals, and startups stay on the right side of compliance. If you're unsure whether your transactions require SFT filing — or if your organization needs assistance in preparing and filing Form 61A — we’re here to help.