The purpose of reporting these transactions is to enable the tax department to provide this information pre-filled in the ITR forms to the taxpayers as announced in the Budget speech of 2021 by the finance minister. There is no ceiling prescribed for reporting such transactions
NEW DELHI: Enhancing the scope of Specified Financial Transactions (SFTs), the Central Board of Direct taxes issued a circular on 12 March to include capitals gains arising from sale of mutual funds and shares, dividend received on shares, as well as interest earned from bank and post office savings or deposits with non-banking financial transactions.
Certain entities including financial institutions such as banks, mutual fund houses, registrars, bond issuers, among others, are required to report transactions beyond a specified limit in the financial year to the tax department. These transactions are known as specified financial transactions (SFTs) under the 114E of the Income Tax Act 1962.
