With less than a week left before the May 31 deadline, officials from the Central Board of Direct Taxes (CBDT) urged banks, co-operative banks, mutual funds (MFs), companies, property registration authorities, foreign exchange dealers, and other specified institutions to ensure timely and error-free filing of the Statement of Financial Transaction (SFT) for 2025–26.
Under the income-tax (I-T) law, these reporting entities are required to furnish details of specified high-value transactions — such as interest payments, dividends, securities trades, MF investments, and property deals — to the I-T department. The information feeds into taxpayers’ annual information statement (AIS), which provides a consolidated view of transactions linked to their permanent account number (PAN) and helps simplify I-T return filing.
An official said the AIS has improved transparency and made tax compliance easier for taxpayers by enabling them to view and verify their financial information in one place through the I-T portal. “The effectiveness of the AIS depends significantly on the quality of information reported. Even small mistakes in SFT filing can create avoidable difficulties for taxpayers,” the CBDT official said.
Common mistakes observed in past filings include incorrect or missing PAN details, duplicate reporting of transactions, inaccurate transaction values — particularly in joint accounts — lack of internal reconciliation, inadequate quality checks before submission, and delays in filing, officials said.
The ministry has advised entities to validate PAN information, reconcile records internally, conduct quality checks, and complete filings within the prescribed timeline.
SFT filing requirements are governed by Section 285BA of the I-T Act, 1961, read with Rule 114E of the I-T Rules. The framework also continues under the I-T Act, 2025.
The I-T department continues to support reporting entities through outreach programmes and stakeholder engagements aimed at improving reporting quality and strengthening the compliance ecosystem. “As India moves towards an increasingly digital and transparent tax administration framework, timely, accurate, and complete SFT reporting becomes even more important. The information furnished by reporting entities directly impacts taxpayer experience and supports voluntary compliance,” the official added.
Reporting entities have been advised to review their processes immediately to ensure smooth compliance with the May 31 deadline.
