What is Form 61A?

To monitor high-worth transactions conducted by taxpayers, the Income Tax Act introduced a fresh concept called the Statement of reportable account or Financial Transactions. The Income Tax Act's Section 285BA mandates specific reporting entities to provide this statement. 
According to the 1962 Income Tax Rules, rule 114E states that this statement must be submitted using Form No. 61A.

Form 61A serves as a report of Specified Financial Transactions that should be submitted by a taxpayer who has been notified for the relevant financial year. So, if you are unaware of what is form 61A, this post will be your ultimate guide to understanding the crucial aspects of filing this Form. 
 

What is Form 61A?

Usually, taxpayers must provide the government with a statement containing information about 'Specified Financial Transactions' or SFT transactions for a specific financial period. So, Form 61A is usually generated per Section 285BA of the Income Tax Act (ITA) and was formerly referred to as the Annual Information Return.

As Rule 114E of the 1962 Income Tax Rules outlines, Form 61A necessitates reporting particulars such as the nature and value of the transactions. Taxpayers must submit Form 61A by May 31st every year immediately following the conclusion of the fiscal year for which it contains data. This process aids in maintaining an accurate record of tax filings and facilitates potential refund claims when applicable.
 

Purpose of Form 61A

Form 61A records all Specified Financial Transactions conducted within a given fiscal year. This assists the Income Tax department in detecting high-value transactions and prevent potential tax evasion. Moreover, having access to these records enables individuals and organizations to monitor high-value specified financial transactions for documentation purposes.

What are Specified Financial Transactions?

The specified financial transactions mentioned earlier fall into the following categories:

• The purchase, sale, or exchange of rights, property, goods, or interests in a property.
• Contracts for works.
• The provision of services.
• Any investments made or expenses incurred.
• The acceptance of deposits or the granting of loans.

It's worth emphasizing that the Central Board of Direct Taxes (CBDT) has the authority to prescribe varying thresholds for different transactions and different individuals or entities based on the kind of these transactions.

Components of Form 61A

Key components of this Form include:

• Full name
• Address
• Folio number
• Year of Financial Year/Transactions 
• Value and Number of SFT
• PAN (Permanent Account Number)
• Detailed transaction information
   

Who Has to File Form 61A?

• A financial institution, including a banking company and co-operative bank
• A non-banking financial company (NBFC)
• Any entity issuing credit cards
• Any individual or entity subject to an audit under section 44AB of the Income Tax Act.
• Postal service offices
• A Nidhi company, as defined in section 406 of the Companies Act 2013
• A corporation issuing bonds or debentures
• A corporation issuing shares
• A mutual fund organization
• A corporation listed on a recognized stock exchange
• A trustee of a mutual fund or an individual authorized by the trustee
• Authorized dealers, offshore banking units, money changers, or any other individuals defined in FEMA (Foreign Exchange Management Act)
• An Inspector General or Sub-Registrar appointed under the Registration Act, 1908
   

Which Transactions are Reported in Form 61A?

What is the Penalty for Default or Delay?

If an individual involved in a specified financial transaction neglect to file Form 61A, authorities will issue a notice requiring the Form's submission within 30 days from the notice's issuance date. If the individual fails to respond to the notice and does not submit Form 61A, a penalty of five hundred rupees daily for non-compliance is imposed. It will start from the date when the period specified in the notice expires.

How to Upload Form 61A?

Uploading Form 61A can be easily accomplished with these essential steps:

• Visit the official e-filing portal.
• Log in to the site using your User ID, Password and authorized PAN.
• Go to the e-file section and select the option to upload the Form 61A.
• After uploading, the screen will display details such as Form Name, reporting entity PAN, and reporting entity Category.
• Attach your Form 61A with a digital signature in zip format.
• Click the 'Upload' button.

You will get a confirmation message indicating the upload status when the validation procedure is completed.
 

How to View Form 61A?

Once you've submitted Form 61A, you may want to check its status. Here are the straightforward steps to view the status of your filed Form 61A:

• Visit the e-filing portal of the Income Tax Department, Government of India.
• Log in to your account using your PAN number, User ID, and password.
• Upon successful login, go to the 'My Accounts' section and select 'View Form 61A.'
• Choose the 'Filing Status and Assessment Year' and then click 'View Details.'
• Review the 'Filing Status' field, which will display the status of your Form 61A, such as 'Accepted,' 'Uploaded,' or 'Rejected.' 
   

Due Date to File Form 61A

The Statement of Financial Transactions must be submitted by the 31st of May of the following year for the previous financial year in which the transaction occurred.

If there is an initial failure to file within the due date, a penalty of Rs 500 per day will be imposed under Section 271FA. The concerned authorities will issue a specific notice to a taxpayer, asking them to submit this Form within thirty days from the date of the notice.

If the taxpayer defaults by not responding to this notice, a penalty of Rs 1000 per day of such default will be levied. This penalty will be calculated from the expiration of the period mentioned in the notice.
 

Penalties for Defective Form 61A

Suppose a reporting entity or individual identifies any inaccuracies or discrepancies in the data provided within Form 61A. In that case, they must promptly contact the relevant income tax authority within a 10-day window to rectify the issue without incurring any penalties. 
When the authorities detect defects or incompleteness in the data furnished within Form 61A online filing, they notify this reporting entity or individual. The reporting entity or individual will then have thirty days to correct the information from the date of notification.

The Income Tax Act prescribes these penalties for those who fail to submit a rectified Form 61A:

• Accurately providing inaccurate information results in a penalty of fifty thousand rupees on reporting entities and individuals.
• Reporting individuals and entities who become aware of data inaccuracies after submitting the statement but do not promptly inform the relevant authorities and provide correct information within 10 days are subject to a penalty of Rs. 50,000.
• If incorrect information is furnished, a penalty of five hundred rupees per day will be assessed from the original due date until it is specified for default in the notice. Subsequently, a one thousand rupees penalty per day is levied beyond the given due date mentioned in the notice.

The tax authority may extend the deadline for rectifying details in default cases. However, if the reporting entity or individual fails to correct the information after receiving the notice, the statement in question (Form 61A) will be deemed invalid.
 

Conclusion

In response to the growing issues of corruption and the accumulation of undisclosed income in India, enforcing compliance with Form 61A meaning of the Income Tax Act 1961 has become more stringent. 
Consequently, individuals and entities must exercise utmost care and diligence when filing Form 61A. Considering these developments, there is a critical call to action for all reporting parties to report all specified transactions diligently and accurately as per Rule 114E, using Form 61A.

Form 61A serves as a powerful tool in combatting tax evasion, and it is incumbent upon the responsible reporting authorities to play their part in enhancing transparency within the system by consistently and punctually submitting Form 61A.