Format, Procedure and Guidelines for submission of Statement of Financial Transactions (SFT) for Mutual Fund Transactions by Registrar and Share Transfer Agent - 04 of 2021 - Income Tax

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. 4 of 2021 New Delhi, 30th April, 2021 Format, Procedure and Guidelines for submission of Statement of Financial Transactions (SFT) for Mutual Fund Transactions by Registrar and Share Transfer Agent 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 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 Registrar and Share Transfer Agents 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. 1 [ With effect from 1st April 2023 the statement of financial transactions data will be submitted on half yearly basis instead of existing quarterly basis i.e. data relating to 1st half of the Financial Year ending 30th September and remaining half of the Financial Year ending on 31st March shall be furnished on or before 31st of October and 30th of April respectively. ] 7. The reporting entities are also required to provide information of mutual fund transactions, 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 ). 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. (Sanjeev Singh) ADG(Systems)-2, CBDT Annexure A Guidelines for Preparation of Statement of Financial Transactions (SFT) The guidelines for preparation of Statement of Financial Transactions (SFT) for Mutual Fund transactions are as under: 1. The Mutual Fund transaction summary file will be used for pre-filling the gain/income/loss from Mutual Fund transactions. 2. The Mutual Fund Transaction Summary is required to be prepared for userinitiated debit transactions during the reporting period. For debits through transfers, information need not be provided if transferor and transferee are same person. 3. In case of a minor, details of legal or natural guardian (PAN, Name etc.) may be provided. 4. Data with respect to exchange traded funds and exchange-based transactions, , may not be provided. 5. The Estimated Sale Consideration for the debit transaction should be determined on the best possible available price of the asset with the RTA. In case the sale consideration related to a sale/transfer is not available, Redemption Offer Price (Exit Load adjusted NAV) on the date of sale/transfer may be taken. The taxpayer will be able to modify the sales consideration before filing the return. 6. The securities should be classified into specified security class for determining the type of asset (short term/long term) and applicable rate. 7. The period of holding (difference between date of sale and date of acquisition of any security) 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 purchases 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: 2 [Security Class Code Security Class Description Minimum Period of Holding Remarks EMF Unit of Equity Oriented Mutual Fund 12 months - UTI Unit of UTI 12 months Where more than 35% of its total proceeds are invested in the equity shares of domestic companies, this information should be provided. Note : Where not more than 35% of its total proceeds are invested in the equity shares of domestic companies, (Specified Mutual Fund), it will always be classified as short-term capital asset ( Applicable from 1st April 2023 ) OTU Other Units 36 months Where more than 35% of its total proceeds are invested in the equity shares of domestic companies, this information should be provided. Note : Where not more than 35% of its total proceeds are invested in the equity shares of domestic companies, (Specified Mutual Fund), it will always be classified as short-term capital asset (Applicable from 1st April 2023)] 8. For every debit transaction, the corresponding credit 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 RTA. In case the cost of acquisition related to a credit/transfer is not available, NAV for the end of the day of the credit may be taken. The taxpayer will be able to modify the cost of acquisition before filing the return. 9. In relation to a long-term capital asset, being 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. 10. The Cost Inflation Index should be used to determine estimated indexed cost of acquisition wherever applicable. 11. The details of clients and summary values for the transactions for the reporting period should be reported in MF Account Summary (MF_ACC_SUMM.TXT) 12. The details of transactions effected through transmission and recorded by the RTA during the year along with off-market transactions recorded in the RTA system should be reported in Mutual Funds Off-Market Transactions (MF_OFF_TRN.TXT) Annexure B Guidelines for Submission of Statement of Financial Transactions (SFT) 1. Reporting entities 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). A separate control statement (refer Annexure C) is required to be signed, verified and furnished by the Designated Director. 2. Any file which does not meet the validation requirements will be rejected. 3. In case Reporting Entity needs to modify uploaded data, Correction Statement is required to be filed. In the Correction Statement, only those records should be uploaded in which correction is required. In case Reporting Entity needs to delete uploaded data, Deletion request is required to be filed. Annexure C Control Statement for Mutual Fund Transactions (RTA) Number of Records Values A.1 Reporting Entity Name A.2 ITDREIN A.3 Registration Number A.4 Statement Type A.5 Statement Number A.6 Original Statement Id A.7 Reason for Correction A.8 Statement Date A.9 Reporting Period Start Date A.10 Reporting Period End Date Number of Records B.1 Mutual Fund Batch File (MF_BATCH.TXT) B.2 Mutual Fund Account Summary (MF_ACC_SUMM.TXT) B.3 Mutual Fund Transaction Summary (MF_TRN_SUMM.TXT) B.4 Mutual Fund Off-Market Transaction (MF_OFF_TRN.TXT) Sum of Key Values in Rs. (Refer Mutual Fund Account Summary) C.1 Opening Value C.2 Purchase Value C.3 Sale Value C.4 Closing Value I, declare that to the best of my knowledge and belief, the information given in the data files is correct and complete and is in accordance with the provisions of the Income-tax Act, 1961. Name _____________ Designation ________________ Annexure D Data Structure The information is required to be uploaded in data file. The data file should be in ASCII format with one report per line. All fields in each file should be delimited with the delimiter | . The first record in the file should contain header text. D.1. Mutual Fund Batch File (MF_BATCH.TXT) This file contains details of reporting entity, principal officer and files uploaded by the reporting entity # Field Mandatory Format Remarks 1. Reporting Entity Name Y VARCHAR (150) Reporting Entity Name 2. ITDREIN Y VARCHAR (20) Registration number allotted by ITD 3. Registration Number N VARCHAR (150) SEBI Registration number 4. Statement Type Y VARCHAR (2) NB - New Statement containing new information DB - Deletion Statement CB - Correction Statement containing corrections for previously submitted information 5. Statement Number Y VARCHAR (20) Internal reference number for reporting entity 6. Original Statement Id Y DECIMAL (18,0) Statement ID of the original Statement which is being replaced deleted or referred in the current Statement. In case the Statement is new and unrelated to any previous Statement, mention 0 here. 7. Reason for Correction Y VARCHAR (1) Reason for revision to be stated when the original Statement is corrected. (Refer Permissible values) 8. Statement D ate Y DATE Statement Date DD-MM-YYYY 9. Reporting Start Date Period Y DATE First day of the reporting period DD-MM-YYYY 10. Reporting End Date Period Y DATE Last day of the reporting period DD-MM-YYYY 11. Principal Name Officer Y VARCHAR (150) 12. Principal Designation Officer Y VARCHAR (150) 13. Principal Officer Address Y VARCHAR (500) 14. Principal Officer Mobile Y VARCHAR (15) 15. Principal Officer Email Y VARCHAR (50) D.2. Mutual Fund Account Summary (MF_ACC_SUMM.TXT) This file contains details of a person and summary values of the financial transactions for the reporting period. # Field Mandatory Format Remarks 1. Sequence Number Y DECIMAL (18,0) Running sequence number for each line in the file. This number will be used during validation checks. 2. Financial Year Y VARCHAR (4) FY in which transaction was recorded-YYYY 3. Reporting Period Y DATE Last day of the reporting period DD-MM-YYYY 4. AMC Name Y VARCHAR (100) AMC s Name 5. AMC Code Y VARCHAR (5) 6. Client ID Y VARCHAR (20) Unique Client ID maintained by the reporting entity 7. Client PAN Y VARCHAR (10) PAN of the Client. Mention PANNOTAVBL if no PAN is available. 8. Client Name Y VARCHAR (250) First Holder s name 9. Client Type Y VARCHAR (1) R - Resident N- Non-resident F - FII Z Not Classified 10. Client Status Y VARCHAR (1) M Minor O - Other X - Not Classified 11. Guardian Name N VARCHAR(250) Mandatory if Client Status is Minor 12. Guardian PAN N VARCHAR(10) Mandatory if Client Status is Minor . Mention PANNOTAVBL if no PAN is available. 13. Client Aadhaar N VARCHAR (12) First Holder s Aadhaar 14. Client DOB N DATE First Holder s DOB/DOI in DD-MM-YYYY 15. Client Address Y VARCHAR (400) First Holder s Address 16. Client City N VARCHAR (40) First Holder s Address-city 17. Client State code N VARCHAR (2) First Holder s Address- State (Refer Permissible values) 18. Client Pincode N DECIMAL (6,0) First Holder s Address- Pincode 19. Client Mobile Number N VARCHAR (15) First Holder s Mobile Number 20. Client E-mail ID N VARCHAR (100) First Holder s E-mail ID 21. Joint holding Y VARCHAR (1) Whether joint holding exists (Y/N) 22. Second Holder PAN N VARCHAR (10) Mandatory if Joint holding exists. Mention PANNOTAVBL if no PAN is available. 23. Second Holder Name N VARCHAR (250) Mandatory if Joint holding exists 24. Second Holder DOB N DATE Second Holder s DOB/DOI in DD-MM-YYYY 25. Third Holder PAN N VARCHAR (10) Mandatory if Joint holding exists. Mention PANNOTAVBL if no PAN is available. 26. Third Holder Name N VARCHAR (250) Mandatory if Joint holding exists 27. Third Holder DOB N DATE Third Holder s DOB/DOI in DDMM-YYYY 28. Opening Value Y DECIMAL (18,2) Value of Holding as on first day of reporting period 29. Purchase Value Y DECIMAL (18,2) Sum of purchase cost (net of transaction charges and stamp duty) during reporting period 30. Transaction Charges Y DECIMAL (18,2) Sum of transaction charges during reporting period 31. Stamp Duty Y DECIMAL (18,2) Sum of stamp duty during reporting period 32. Sale Value Y DECIMAL (18,2) Sum of Value of Units Sold (including TDS and excluding STT and Exit Load) during reporting period 33. STT Y DECIMAL (18,2) Sum of STT during reporting period 34. Dividend Paid Y DECIMAL (18,2) Sum of dividend received (inclusive of TDS) during reporting period 35. Closing Value Y DECIMAL (18,2) Total Value of Holding as on the last day of reporting period Note: Refer Guidelines for preparation of SFT for more details D.3. Mutual Fund Transaction Summary (MF_TRN_SUMM.TXT) This file shall contain details of security level transaction summary in respect of sales/debits during the reporting period. # Field Mandatory Format Remarks 1. Sequence Number Y DECIMAL (18,0) Running sequence number for each line in the file. This number will be used during validation checks. 2. Financial Year Y VARCHAR (4) FY in which sale transaction was recorded-YYYY 3. Reporting Period Y DATE Last day of the reporting period DD/MM/YYYY 4. AMC Code Y VARCHAR (5) 5. Client ID Y VARCHAR (20) Client ID maintained by the reporting entity 6. Client PAN Y VARCHAR (10) PAN of the Client. Mention PANNOTAVBL if no PAN is available. 7. Client Name Y VARCHAR (250) First Holder s name 8. Security Class Code Y VARCHAR (3) See permissible values 9. Security Code Y VARCHAR (12) Unique security code (e.g. ISIN). Mention ISINNOTAVBLE if no ISIN is available. 10. Security Name Y VARCHAR (200) Name of security (scheme, plan and option) 11. Debit Date Y DATE Date of Debit in DD/MM/YYYY 12. Debit Type Y VARCHAR (1) Refer Guidelines A AMC (redemption) T Transfer 13. Credit Type Y VARCHAR (1) Refer Guidelines A AMC (purchase) T Transfer 14. Asset Type Y VARCHAR (1) Refer Guidelines S Short Term L Long Term 15. Units Y DECIMAL (18,3) Units sold or transferred. Refer Guidelines. 16. Unit price Y DECIMAL (18,2) Estimated Sale price per unit. 17. Sale Consideration Y DECIMAL (18,2) Estimated Sale Consideration. 18. COA Y DECIMAL (18,2) Estimated Cost of acquisition without indexation. 19. Unit FMV Y DECIMAL (18,2) FMV per unit as on 31.01.2018. Refer Guidelines 20. Total FMV Y DECIMAL (18,2) Total FMV as on 31.01.2018. 21. Adjusted FMV N DECIMAL (18,2) If the long term capital asset was acquired before 01.02.2018, Lower of Sale Consideration and Total FMV. 22. Adjusted COA N DECIMAL (18,2) Cost of acquisition without indexation (higher of COA and Adjusted FMV) 23. Indexed COA N DECIMAL (18,2) Wherever applicable 24. STT Y DECIMAL (18,2) STT Note: Refer Guidelines for preparation of SFT for more details D.4. Mutual Funds Off-Market Transaction (MF_OFF_TRN.TXT) This file shall contain details of Mutual Fund off-market transactions recorded for a person/client during the year. # Field Mandato ry Format Remarks 1. Sequence Number Y DECIMAL (18,0) Running sequence number for each line in the file. 2. Financial Year Y VARCHAR (4) 3. Reporting Period Y DATE Last day of the reporting period DD-MM-YYYY 4. Transfer Date Y DATE Date format- DD-MMYYYY 5. Transferor AMC Code Y VARCHAR (5) 6. Transferor Client ID Y VARCHAR (20) 7. Transferor PAN Y VARCHAR (10) Mention PANNOTAVBL if no PAN is available. 8. Transferor Name Y VARCHAR (250) First Holder s name 9. Transferee AMC Code Y VARCHAR (5) 10. Transferee Client ID Y VARCHAR (20) 11. Transferee PAN Y VARCHAR (10) Mention PANNOTAVBL if no PAN is available. 12. Transferee Name Y VARCHAR (250) 13. Security Class Code VARCHAR (3) Refer Permissible values 14. Security Code Y VARCHAR (12) Unique Security Code (e.g. ISIN) 15. Security Name Y VARCHAR (200) Name of Security 16. Quantity transferred Y DECIMAL (18,3) No of Units transferred 17. Reported Consideration N DECIMAL (18,2) Consideration reported during transfer 18. EOD Unit Price Y DECIMAL (18,2) Redemption Offer Price (Exit Load adjusted NAV) on the date of transfer 19. EOD Value Y DECIMAL (18,2) Estimated Transaction Value (End of day price) 20. Reason Code Y VARCHAR (3) Refer Permissible Values 21. Remarks N VARCHAR (100) Reason Note: Refer Guidelines for preparation of SFT for more details Permissible Values - Statement Type # Code Description 1. NB New Batch (Statement) containing new information 2. DB Deletion Batch (Statement) 3. CB Correction Batch (Statement) containing corrections for previously submitted information Permissible Values - Reason for Correction # Code Description 1. A Acknowledgement of original Statement had many errors which are being resolved 2. B Errors in original Statement are being corrected suo-motu 3. C The correction report is on account of additional information being submitted 4. N Not applicable as this is a new statement/test data/ there is no data to report 5. Z Other reason Permissible Values Security Class Code # S ecurity Class Code Description 1. EMF Unit of Equity Oriented Mutual Fund 2. UTI Unit of UTI 3. OTU Other Units Permissible Values Transaction Reason # Reason Code Reason Description 1. TRD Transmission (change in holding in event of death of a holder) 2. OTH Other 3. ZZZ Not Specified Permissible Values - State code # State/Union Territories Code 1. Andaman and Nicobar AN 2. Andhra Pradesh AP 3. Arunachal Pradesh AR 4. Assam AS 5. Bihar BR 6. Chandigarh CH 7. Dadra and Nagar Haveli DN 8. Daman and Diu DD 9. Delhi DL 10. Goa GA 11. Gujarat GJ 12. Haryana HR 13. Himachal Pradesh HP 14. Jammu and Kashmir JK 15. Karnataka KA 16. Kerala KL 17. Lakshadweep LD 18. Madhya Pradesh MP 19. Maharashtra MH 20. Manipur MN 21. Meghalaya ML 22. Mizoram MZ 23. Nagaland NL 24. Orissa OR 25. Pondicherry PY 26. Punjab PN 27. Rajasthan RJ 28. Sikkim SK 29. Tamil Nadu TN 30. Telangana TS 31. Tripura TR 32. Uttar Pradesh UP 33. West Bengal WB 34. Ladakh LA 35. Chhattisgarh CG 36. Uttarakhand UK 37. Jharkhand JH Table - Capital Gain Index Chart Financial Year Cost Inflation Index (CII) 2001-02 (Base year) 100 2002-03 105 2003-04 109 2004-05 113 2005-06 117 2006-07 122 2007-08 129 2008-09 137 2009-10 148 2010-11 167 2011-12 184 2012-13 200 2013-14 220 2014-15 240 2015-16 254 2016-17 264 2017-18 272 2018-19 280 2019-20 289 2020-21 301 Annexure E Validation Rules The errors have been classified in following categories: Errors Record or report level errors which need to be resolved by user as per the specific error code. Defects The reporting entity needs to correct and submit the reports again in the corrected statement. Exceptions The exceptions should be reviewed by the reporting person/entities and if any information is available, the reporting entity may provide the information. If any defect is noticed, the reporting entity needs to rectify the defect by submitting a correction statement. The validation rules are as under: # Error Message Error Type File Rejection 1. Control Statement Values Mismatch Error Y 2. Sequence Number in Submitted file is not running sequence number Error Y 3. Client Data not provided for reported transaction Defect N 4. Mandatory Field is blank Defect N 5. Invalid PAN reported Exception N 6. Excessive Value Reported Exception N 7. Mismatch identified after matching data with other submitted data Exception N *************** NOTES:- 1. Corrected vide Corrigendum to Notification No. 4 of 2021 dated 15-11-2023 before it was read as, 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. 2. Corrected vide Corrigendum to Notification No. 4 of 2021 dated 15-11-2023 before it was read as, Security Class Code Security Class Description Minimum Period of Holding EMF Unit of Equity Oriented Mutual Fund 12 months UTI Unit of UTI 12 months OTU Other Units 36 months