Income Tax Law / Compliance Guide

Section 285BA: Statement of Financial Transactions and Reportable Accounts

Section 285BA of the Income-tax Act, 1961 requires specified reporting persons to furnish information on prescribed financial transactions and reportable accounts. The corresponding provision under the Income-tax Act, 2025 is Section 508. This guide explains who must report, what is reported, the filing process and consequences of default.

1. What is a Statement of Financial Transaction?

A Statement of Financial Transaction (SFT) is a prescribed information return filed by specified reporting persons to disclose transactions of the nature and value notified under the income-tax rules. A reportable account is an account identified by a reporting financial institution under applicable due-diligence and information-exchange rules, including the relevant FATCA and Common Reporting Standard framework.

2. Section 285BA of the Income-tax Act, 1961

Sub-section (1): Persons responsible for reporting

The provision covers prescribed reporting persons who register or maintain records of specified financial transactions or reportable accounts. The statutory categories include:

• Assessees and prescribed officers of Government offices;
• Local authorities, public bodies and associations;
• Registrars and Sub-Registrars under the Registration Act, 1908;
• Motor vehicle registering authorities;
• Postal authorities and land acquisition Collectors;
• Recognised stock exchanges, Reserve Bank of India officers and depositories;
• Prescribed reporting financial institutions and other persons specified by law.

Being within a broad statutory category does not mean every transaction is reportable. The prescribed transaction type, threshold and reporting-person rules must also be satisfied.

Sub-sections (2) and (3): Period, manner and meaning of specified financial transaction

Statements must be furnished for the prescribed period, by the prescribed deadline and in the prescribed form and manner. The definition can cover purchases, sales or exchanges of goods or property and rights therein, services, works contracts, investments, expenditure, loans and deposits, where prescribed.

Sub-sections (4) to (7): Defects, notices, corrections and due diligence

The tax authority may identify defects and allow a 30-day period for rectification, subject to permitted extension. Non-filers may receive a notice requiring submission within a period not exceeding 30 days. A person discovering an inaccuracy must inform the authority and furnish corrected information within 10 days. Registration, record maintenance and due diligence for reportable accounts are governed by the applicable rules.

3. Section 508 of the Income-tax Act, 2025

Section 508 (official text) carries forward the obligation to furnish statements of specified financial transactions and reportable accounts. It includes prescribed reporting persons and permits the Board to prescribe values for different transactions. It also provides for rectification of defective statements, non-filer notices, corrections and due diligence. The newer provision refers to the Director General under the Post Office Act, 2023 and includes other prescribed persons.

The official Income-tax Act, 2025 should be read with the notified rules for the relevant reporting year. A section number alone does not establish a form or filing deadline.

4. Common transactions reported under SFT

Under Rule 114E of the Income-tax Rules, 1962, examples of reportable transactions include the following, subject to the specified reporting person and aggregation conditions:

These are selected examples under the earlier rule, not an exhaustive schedule and not a substitute for the rules applicable from 2026. For the full list, see the official SFT guide and Rule 114E.

5. Filing forms and deadlines

Under the 1961 Act framework, Form 61A is used for SFT reporting under Rule 114E, generally due by 31 May after the relevant financial year, with special half-yearly reporting for certain securities and mutual fund transactions. Prescribed reporting financial institutions submit reportable account information in Form 61B, generally by 31 May following the calendar year under Rules 114F to 114H.

For filings governed by the Income-tax Act, 2025, reporting persons should confirm the corresponding forms, due dates, schema and portal instructions under the notified 2026 rules rather than assume earlier form numbers apply unchanged.

6. Non-compliance and penalties

For defaults governed by the 1961 Act, Section 271FA prescribes a penalty of Rs. 500 per day for failure to furnish the required statement, increasing to Rs. 1,000 per day after failure to comply within the period specified in a statutory notice. Section 271FAA addresses inaccurate reporting and due-diligence failures, subject to its statutory conditions. For defaults under the 2025 Act, the corresponding penalty provisions and applicable rules must be checked separately.

7. Practical compliance checklist

1. Identify whether the entity is a prescribed reporting person or financial institution.
2. Classify transactions and accounts under the relevant rule and reporting year.
3. Apply the correct monetary thresholds, aggregation and due-diligence requirements.
4. Confirm the notified form, filing deadline and reporting portal instructions.
5. Validate PAN, account-holder and transaction data before submission.
6. Preserve acknowledgments and correct inaccuracies within the statutory time.

8. Official legislation and guidance

• Section 285BA - Income-tax Act, 1961
• Section 508 - Income-tax Act, 2025
• Income Tax Department SFT filing guide
• Section 271FA - Penalty for non-filing
• Official reportable-account filing FAQ

Last reviewed: 28 October 2026. This article provides general statutory guidance. Check notifications and transitional provisions for the relevant reporting period.