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DGIT(S)/ADG(S)-2/Reporting Portal/2021/180
Government of India
Ministry of Finance
Central Board of Direct Taxes
Directorate of Income Tax (Systems)
Notification No. 3 of 2021
New Delhi, 30th April, 2021
Format, Procedure and Guidelines for submission of Statement of Financial Transactions
(SFT) for Depository Transactions
Section 285BA of the Income Tax Act, 1961 and Rule 114E requires specified reporting persons
to furnish statement of financial transaction (SFT).
2.
For the purposes of pre-filling the return of income, CBDT has issued Notification No.
16/2021 dated 12.03.2021 to include reporting of information relating to Capital gains on
transfer of listed securities or units of Mutual Funds. The new sub rule 5A of rule 114E specifies
that the information shall be furnished in such form, at such frequency, and in such manner,
as may be specified by the Director General of Income Tax (Systems), with the approval of the
Board.
3.
The guidelines for preparation and submission of Statement of Financial Transactions
(SFT) information are enclosed in Annexure A and Annexure B respectively. The format of
control statement to be submitted by the Designated Director is given in Annexure C. The
data structure and validation rules are enclosed in Annexure D and Annexure E respectively.
Notification No. 3 of 2018 dated 05.04.2018 may be referred for the procedure for
registration.
4.
All Depositories as defined in clause (e) of sub-section (1) of section 2 of
the Depositories Act, 1996(22 of 1996) are required to prepare the data file in prescribed
format from their internal system. Reporting entities are required to submit the data files
using SFTP Server using the login credentials (To be communicated separately).
5.
A separate control statement (refer annexure C) is required to be signed, verified and
furnished by the Designated Director.
6.
The statement of financial transactions relating to Financial Year 2020-21 shall be
furnished on or before the 31st May 2021. Thereafter, the statement of financial transactions
relating to the quarter ending 30th June, 31st September, 31st December and 31st March shall
be furnished on or before 25th of July, October, January and April respectively.
7.
The reporting entities are also required to provide information reported to Income
Tax Department, to the account holder which will enable taxpayers to reconcile the
information displayed in the Annual Information Statement (AIS) (Form 26AS).
Format, Procedure and Guidelines for submission of Statement of Financial Transactions (SFT) for Depository Transactions
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8.
In case, the reporting person/entity comes to know or discovers any inaccuracy in the
information provided in the statement or the defects have been communicated to the
reporting person/entity, it is required to remove the defects by submitting a
correction/deletion statement.
9.
The reporting person/entity is required to document and implement appropriate
information security policies and procedures with clearly defined roles and responsibilities to
ensure security of submitted information and related information/documents. The reporting
person/entity is also required to document and implement appropriate archival and retrieval
policies and procedures with clearly defined roles and responsibilities to ensure that
submitted information and related information/documents are available promptly to the
competent authorities.
10.
This issues with the approval of CBDT. This Notification shall come into effect from
the date of issue.
Copy to:
1. PPS to the Chairman and Members, CBDT, North Block, New Delhi.
2. All Pr. Chief Commissioners/ Pr. Director Generals of Income Tax and all Chief
Commissioners/ Director Generals of Income Tax — with a request to circulate amongst
all officers in their regions/ charges.
3. JS (TPL)-I &2/ Media coordination and Official spokesperson of CBDT
4. DIT (IT)/ DIT (Audit)/ DIT (Vig.)/ ADG (System) 1, 2, 3, 4, / CIT (CPC) Bangalore, CIT (CPC-
TDS) Ghaziabad.
5. ADG (PR, PP&OL) with a request for advertisement campaign for the Notification.
6. TPL and ITA Divisions of CBDT.
7. The Institute of Chartered Accountants of India, IP Estate, New Delhi.
8. Web Manager, "incometaxindia.gov.in" for hosting on the website.
9. Database cell for uploading on www.irsofficersonline.gov.in and in DGIT (S) Corner.
10. ITBA publisher for uploading on [TBA portal.
Format, Procedure and Guidelines for submission of Statement of Financial Transactions (SFT) for Depository Transactions
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Annexure A
Guidelines for Preparation of Statement of Financial Transactions (SFT)
The guidelines for preparation of Statement of Financial Transactions (SFT) for Depository
transactions are as under:
1. The Depository transaction summary file will be used for pre-filling the
gain/income/loss from securities transactions. The Depository Transaction
Summary is required to be prepared for user-initiated debit transactions in the
demat account. For Off Market debits, information need not be provided if
transferor and transferee are same person.
2. In case of a minor, details of legal or natural guardian (PAN, Name etc.) may be
provided.
3. The Estimated Sale Consideration for the debit transaction should be determined
on the best possible available price of the asset with the depository (e.g. end of
day price). The taxpayer will be able to modify the sales consideration before filing
the return.
4. The securities should be classified into specified security class for determining the
type of asset (short term/long term) and applicable rate.
5. The period of holding (difference between date of sale and date of acquisition of
any share/security in the demat account) should be used to classify the asset as
short term or long-term asset. First in First out (FIFO) method should be used for
identification of corresponding credit in demat account and computation of
period of holding. Any capital asset held by the taxpayer for a period of more than
minimum period of holding will be treated as long-term capital asset and
remaining assets will be classified as short-term asset. The specified minimum
period of holding for different asset class is as under:
Security
Class Code
Security Class Description
Minimum
Period of
Holding
LES
Listed Equity Share
12 months
LPS
Listed Preference Share
12 months
LDB
Listed Debenture
12 months
ZCB
Zero Coupon Bond
12 months
CIB
Listed Capital Indexed Bond
12 months
EMF
Unit of Equity Oriented Mutual Fund
12 months
UTI
Unit of UTI
12 months
UBT
Unit of Business Trust
36 months
OTU
Other Units
36 months
OTH
Other Listed Securities (Other than a unit)
12 months
Format, Procedure and Guidelines for submission of Statement of Financial Transactions (SFT) for Depository Transactions
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6. For every debit transaction, the corresponding credit transaction should be
identified using First in First Out (FIFO) method. The estimated cost of acquisition
for the credit should be determined on the best possible available price with the
depository. The cost of acquisition can be estimated as per the closing rate on the
date (T-2) of transaction for market purchase. The estimated cost of acquisition is
to be taken as NIL for OFF Market purchase, IPO or Corporate Action or for any
transaction through other than Exchange. The taxpayer will be able to modify the
cost of acquisition before filing the return.
7. In relation to a long-term capital asset, being an equity share in a company or a
unit of an equity-oriented fund acquired before the 1st day of February, 2018,
adjusted cost of acquisition shall be higher of (i) the cost of acquisition of such
asset; and (ii) lower of (A) the fair market value of such asset as on 31st January,
2018; and (B) the full value of consideration received or accruing as a result of the
transfer of the capital asset. In a case where the capital asset is listed on any
recognized stock exchange as on the 31st day of January, 2018, "fair market value"
means the highest price of the capital asset quoted on such exchange on the said
date. If there is no trading in such asset on such exchange on the 31st day of
January, 2018, the highest price of such asset on such exchange on a date
immediately preceding the 31st day of January, 2018 when such asset was traded
on such exchange shall be the fair market value. In case the cost of acquisition of
asset acquired before the 1st day of February, 2018 is not easily available, the
adjusted cost of acquisition may be taken as lower of (A) the fair market value of
such asset; and (B) the full value of consideration.
8. The Cost Inflation Index should be used to determine estimated indexed cost of
acquisition wherever applicable.
9. The details of demat account holders and summary values for the demat account
for the reporting period should be reported in Depository Account Summary
(DEP_ACC_SUMM.TXT).
10. The details of off-market transactions recorded by the depository during the year
should be reported in Depository Off-Market Transactions (DEP_OFF_TRN.TXT).
