I-T Dept flags common errors in SFT filings by banks, MFs

The Income Tax Department's analysis of Statement of Financial Transactions filings by banks and mutual funds has identified common errors, such as duplicate reporting, incorrect transaction values, and missing PAN details, which can cause inconvenience for taxpayers, officials said on Monday.

Under the Income Tax Act, reporting entities are required to furnish details of prescribed financial transactions and reportable accounts in the Statement of Financial Transactions (SFT) to tax authorities.

The due date for filing SFTs for the financial year 2025-26 is May 31, 2026.

Reporting entities, which are required to file SFT returns with tax authorities, include forex dealers, banks, sub-registrar, NBFC, post offices, issuer of bonds/debentures, mutual fund trustees, and companies paying dividends or buying back shares.

Income Tax department officials said some common mistakes that have been observed in SFT reporting include incorrect or missing PAN details, duplicate reporting of transactions, incorrect transaction values (particularly in transactions in joint accounts/ names), lack of reconciliation of transaction records before filing, insufficient quality checks before submission, and delay in filing SFTs, among others.

''Such errors may lead to confusion or inconvenience for taxpayers,'' an official said.

Officials underlined the need for reporting entities to avoid such errors by measures, such as validating PAN information before filing, reconciling transaction data internally, ensuring timely submission, and conducting periodic quality checks before uploading SFTs.

The tax department's Annual Information Statement (AIS), which allows taxpayers to view important financial information linked to their PAN directly on the Income-tax portal, incorporates reports received in SFT.

Information relating to interest income, dividends, securities transactions, mutual fund investments, property transactions, and other specified financial transactions becomes available in one place.

This helps taxpayers verify information while filing their Income-tax Returns and supports more accurate return filing, and taxpayers benefit from greater transparency and a smoother compliance experience, officials said.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)