HomeBlogFinance & accountingAddendum to Notification 2 of 2021 : Format, Procedure and Guidelines for submission of Statement of Financial Transactions (SFT) for Interest income (Abolishing of limit of Rs 5,000).

Addendum to Notification 2 of 2021 : Format, Procedure and Guidelines for submission of Statement of Financial Transactions (SFT) for Interest income (Abolishing of limit of Rs 5,000).

  • January 31, 2023
  • Posted by: CA Sudha G. Bhushan
  • Category: Finance & accounting
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Name of the Circular/Update : Addendum to Notification 2 of 2021 : Format, Procedure and Guidelines for submission of Statement of Financial Transactions (SFT) for Interest income (Abolishing of limit of Rs 5,000).

Date Of Issue : January 05, 2023

Circular / Update number : Notification No. 1/2023

Summary : Section 285BA of the Income Tax Act, 1961 and Rule 114E requires specified reporting persons to furnish statement of financial transaction (SFT). Previously the information was to be reported for all account/deposit holders where cumulative interest exceeds Rs 5,000 per person in the financial year. From January 05, 2023 the limit of Rs. 5,000 is abolished and the information is to be reported for all account/deposit holders where any interest exceeds zero per person in the financial year excluding Jan Dhan Accounts.

Link for the Circular /Update : https://incometaxindia.gov.in/communications/notification/notification-1-2023-systems.pdf

Full Provision : Sub: Addendum to Notification 2 of 2021 : Format, Procedure and Guidelines for submission of Statement of Financial Transactions (SFT) for Interest income (Abolishing of limit of Rs 5,000)

  1. Section 285BA of the Income Tax Act, 1961 and Rule 114E requires specified reporting persons to furnish statement of financial transaction (SFT). 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 interest income. The Format, Procedure and Guidelines for submission of Statement of Financial Transactions (SFT) for Interest income was notified via Notification 2 of 2021 dated 20th April 2021.
  2. As per sub-rule (4)(b) of Rule 114E Director General of Income-tax (Systems) shall specify the procedures, data structures and standards for ensuring secure capture and transmission of data, evolving and implementing appropriate security, archival and retrieval policies.
  3. The Remarks column point 1 at Annexure A– Guidelines for Preparation of Statement of Financial Transactions (SFT) mentioned “The information is to be reported for all account/deposit holders where cumulative interest exceeds Rs 5,000/- per person in the financial year’.
  4. The Remarks column at Annexure A is hereby being modified and may be read as “The information is to be reported for all account/deposit holders where any interest exceeds zero per account in the financial year excluding Jan Dhan Accounts”.

In the view of the changes mentioned above, the limit prescribed in Notification 2 of 2021 dated 20th April 2021 stands abolished and this addendum will come into effect from 05/01/2023.Notification No. 1/2023



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