High-Value Transactions, SFT Reporting and Income-Tax Notices — What Banks, Registrars and Brokers Report, the Thresholds, Your AIS, and How to Stay Clear
Video Explanation & Insights
High-value transactions explained: what SFT reports to the income-tax department
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Your financial footprint
Every large financial move — a cash deposit, a fixed deposit, a mutual fund purchase, a flat — leaves a digital record, and section 285BA of the Income-tax Act requires banks, post offices, NBFCs, companies, mutual funds, registrars and others to report specified transactions above set limits to the department in a Statement of Financial Transactions (Form 61A, filed electronically by 31 May after the financial year). The data flows into your Annual Information Statement, and the department's systems compare it with your return. The purpose is transparency and making evasion difficult; the practical effect is that unexplained high-value transactions generate notices.
| Transaction | Threshold in a financial year | Reported by |
|---|---|---|
| Cash deposits or withdrawals in current accounts | ₹50 lakh or more (aggregate across accounts; deposits and withdrawals tested separately) | Bank |
| Cash deposits in savings and other accounts | ₹10 lakh or more (aggregate) | Bank, post office |
| Fixed deposits (other than renewals) | ₹10 lakh or more | Bank, post office, NBFC |
| Credit card bill payments | ₹1 lakh or more in cash; ₹10 lakh or more by any other mode | Card issuer |
| Bonds / debentures, shares, mutual fund units | ₹10 lakh or more in each category | Issuer, company, fund |
| Purchase or sale of immovable property | ₹30 lakh or more — the higher of consideration and stamp duty value | Registrar / sub-registrar |
| Cash sale of goods or services | Above ₹2 lakh per transaction | The seller (also barred by section 269ST) |
Where taxpayers trip
| Area | The rule | The mistake |
|---|---|---|
| Shares held over a year (LTCG) | Gains up to ₹1.25 lakh a year exempt (₹1 lakh before 23 July 2024); above that taxed at 12.5%. 'Share harvesting' — booking gains up to the limit each year and reinvesting — uses the exemption annually | Not reporting exempt gains at all; gains reported by the depository do not match the return |
| Intraday and F&O trading | Business income; audit when turnover crosses the section 44AB limit (₹10 crore with 95% digital receipts and payments; F&O turnover is the sum of absolute profits and losses) | Filing as 'no income' because the year ended in loss — the broker's SFT shows the trades |
| Property | Buyer deducts 1% TDS under section 194-IA on purchases of ₹50 lakh or more; seller reports capital gains — 12.5% without indexation for transfers after 23 July 2024, with the option of 20% with indexation for property bought before that date | Registrar's ₹30 lakh report with no capital gain in the return; sale below stamp duty value (section 50C) |
| Crypto and virtual digital assets | 30% tax on gains under section 115BBH, no set-off of losses, 1% TDS under section 194S on transfers above the limit; reported in Schedule VDA | Treating crypto like shares, or omitting it because the exchange is offshore |
| Home-loan interest | Deduction under section 24(b) up to ₹2 lakh on a self-occupied house, only for a loan on a house you own and occupy | Claiming interest on a parent's or spouse's loan, or on an under-construction property before completion |
| New regime slabs | From FY 2025-26 income up to ₹12 lakh attracts no tax under the new regime (rebate under 87A with the ₹75,000 standard deduction for salaried) | Assuming no return is needed — a return is still due when income exceeds the basic exemption or SFT items exist |
If a notice comes
- •Read the section: 143(1) intimation (arithmetic / mismatch), 139(9) defective return, 133(6) information call, 142(1) enquiry, 148A show-cause before reassessment, 143(2) scrutiny.
- •Check the e-filing portal's e-Proceedings and the AIS 'feedback' option — many mismatches close by marking the AIS entry as 'information is duplicate / relates to another year / not fully correct'.
- •Reply within the deadline with documents: bank statements, sale deeds, contract notes, gift deeds, loan sanctions. Silence converts an enquiry into an addition.
- •Where the return was wrong, file an updated return (ITR-U) with the additional tax rather than wait for reassessment.
High-value transactions: questions we are asked
The bank reports it; a notice follows only if your return cannot explain the source. Keep the trail and report the income.
The Annual Information Statement on the e-filing portal that shows what reporting entities filed about you — SFT, TDS, GST turnover, foreign remittances. Reconcile it before filing.
Yes — the registrar reports purchases and sales of ₹30 lakh or more (higher of price and stamp value). Above ₹50 lakh the buyer also deducts 1% TDS.
₹1.25 lakh a year (from 23 July 2024). Booking gains up to the limit each year and reinvesting — share harvesting — uses the exemption without tax.
Trading is business income; audit depends on turnover computed as the sum of absolute profits and losses. Loss years must still be reported to carry the loss forward.
Flat 30% on gains with no loss set-off, 1% TDS on transfers, reported in Schedule VDA.
It is an information call; reply with the documents within the time given. We draft and file the response.