The Income Tax Department on Friday said it has found discrepancies in Statement of Specified Financial Transaction (SFT) reports filed by some banks with regard to high value financial transactions.
Under SFT, specified institutions are required to furnish the details of certain financial transactions or any reportable account maintained by them during the year.
The last date for filing an SFT for a fiscal is May 31 of the subsequent fiscal.
The reporting entities which are required to file SFT returns with tax authorities include forex dealers, banks, sub-registrar, NBFC, post offices, issuer of bonds/debentures, mutual fund trustees, company paying dividend or buying back shares.
In a statement, the Central Board of Direct Taxes said, recently the department carried out 'verification' of a Tamil Nadu-based 'prominent bank' to address Reporting Entity compliance issues.
"In the recent past too, verification was conducted by the department on 2 cooperative banks in Uttarakhand and transactions exceeding few thousand crore, not reported by the banks, were identified," CBDT said.
The information furnished by Reporting Entities is used for display to the taxpayer, through the e-filing account, in the form of the Annual Information Statement (AIS).
With regard to the Tamil Nadu-based bank, CBDT said "during the course of verification, several discrepancies were found".
It was seen that the bank had not filed SFTs in certain cases and in some others, had not filed complete/accurate particulars. SFTs were not filed in respect of cash deposits of over Rs 2,700 crore involving more than 10,000 accounts; specified credit card payments involving total transaction value of over Rs 110 crore; dividend distributed of more than Rs 200 crore and shares issued of over Rs 600 crore.
Further, SFTs already filed by the bank were found incomplete in several respects. The bank had failed to report major transactions which included interest paid of more than Rs 500 crore; time deposits, cash deposits and withdrawals in current accounts, etc.
The verification also revealed defective filing of Form 61B for Automatic Exchange of Information (AEOI) about account holders “resident” in other countries, the I-T department said.
CBDT further said it is conducting outreach programmes in order to explain the legal obligations and processes, as well as to address difficulties faced by Reporting Entities.
The CBDT statement, however, does not mention the action being taken against the Reporting Entities who fail to make correct disclosure in SFTs.
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