Format, Procedure and Guidelines for submission of Statement of Financial Transactions (SFT) for Dividend income by Reporting Entities

New Delhi, 20 April, 2021

Section 285BA of the Income Tax Act, 1961 and Rule 114E requiresspecified reporting persons to furnish statement of financial transaction (SFT).

2. 2. For the purposes of pre­filling the return of income, CBDT has issued Notification No. 16/2021 dated 12.03.2021 to include reporting of information relating to dividend income. 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. 3. The guidelines for preparation and submission of Statement of Financial Transactions (SFT) information are enclosed in Annexure A and Annexure B respectively. The data structure and validation rules are enclosed in Annexure C and Annexure D respectively. Notification No. 3 of 2018 Dated 5.04.2018 may be referred for the procedure for registration.

4. Reporting entities are required to prepare the data file in prescribed format from their internal system. An excel based report preparation utility has also been provided to assist small reporting entities in preparing data file. The data files prepared by internal system/report preparation utility should be validated using Text File Validator/Submission Utility. After validation, the text file is required to be compressed, encrypted and signed using the Text File Submission Utility before uploading on the reporting portal (https://report.insight.gov.in/). Reporting entities, having large number of data files, can also submit the data files using SFTP Server (specific request may be made for SFTP upload)

5. The statement of financial transactions shall be furnished on or before the 31 st May, immediately following the financial year in which the transaction is registered or recorded.

6. The statement of financial transaction shall be signed, verified and furnished by the specified Designated Director. Where the reporting person is a non­resident, the statement may be signed, verified and furnished by a person who holds a valid power of attorney from such Designated Director. The data files are required to be uploaded at the reporting portal through the login credentials (PAN and password) of the designated director.

7. The reporting entities are advised to provide information of dividend income, reported to Income Tax Department, to the Tax payers which will enable them to reconsile the information displayed in the Annual information statement (AIS) (Form 26AS)

8. In case, the reporting person/entity comes to know or discovers any inaccuracy in the information provided in the statements or the defects have been communicated to the reporting person/entity, it is required to remove the defects by submitting correction/deletion statement.

9. The reporting/entity is required to document and implement appropriate information security policies and procedures which 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 Notification shall come into effect from the date of issue.

(Anu j.Singh)
DGIT(systems), CBDT

Copy to:

1. 1. PPS to the Chairman and Members, CBDT, North Block ,New delhi.
2. 2. All Pr. chief commissioners / Pr. Director Generals of Income Tax and all chief commissioners/Director General of Income Tax – with a request to circulate amongst all officers in the regions/charges.
3. 3. Js(TPL)-1&2 / Media coordination and Official Spokesperson of CBDT.
4. 4. DIT(IT) /DIT (Audit) /DIT (Vig.)/ADG (system) 1,2,3,4,5,6 / CIT (CPC) Bangalore, CIT (CPC-TDS) Ghazaibad.
5. 5. ADG (PR, PP & OL) with a reqquest for advertisement compaign for the Notification.
6. 6. TPL and ITA Divisions of CBDT .
7. 7. The Institutes of Charted Accountants of India, IP Estate, New Delhi.
8. 8. Web manager, “incometaxindia.gov.in” for hosting on the website.
9. 9. Database cell for uploading on www.irsofficersonline.gov.in and in DGIT (s) Corner.
10. 10. ITBA publisher for uploading on ITBA portal.

(Sanjeev Singh)
ADG(system)-2 CBDT

To Read More….
Click the link below…..

https://www.dropbox.com/s/74uw6g5q9xb6wer/notification_1_2021_dividend_income.pdf?dl=0