CBDT urges accurate SFT filing by banks, mutual funds before May 31
May 25, 2026
CBDT has asked banks, mutual funds and other reporting entities to ensure timely and error-free filing of Statements of Financial Transactions
With less than a week left for the May 31 deadline, Central Board of Direct Taxes (CBDT) officials have urged banks, cooperative banks, mutual funds, companies, property registration authorities, foreign exchange dealers and other specified institutions to ensure timely and error-free filing of Statements of Financial Transactions (SFTs) for FY26.
These reporting entities are required under the Income-tax law to furnish details of specified high-value transactions, such as interest payments, dividends, securities trades, mutual fund investments and property deals, to the Income-tax 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 Income-tax Return filing.
Officials said the AIS has significantly improved transparency and made tax compliance easier for taxpayers by enabling them to view and verify their financial information in one place through the Income-tax 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,” a 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, according to officials.
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 Income-tax Act, 1961, read with Rule 114E of the Income-tax Rules. The framework also continues under the Income-tax Act, 2025.
The Income-tax 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, 2026 deadline.
[The Business Standard]
