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TMI BlogREPORTING OF SPECIFIED FINANCIAL TRANSACTIONS (SFT) - BANKS etc.- REPORTING OF INTEREST PAID / CREDITED - NO MINIMUM LIMIT VIDE NOTIFICATION 1 OF 2023 05.01.23. even exempted interest paid/ credited will require reporting. Only Jan Dhan account will remain out of reporting.X X X X Extracts X X X X X X X X Extracts X X X X ..... REPORTING OF SPECIFIED FINANCIAL TRANSACTIONS (SFT) - BANKS etc.- REPORTING OF INTEREST PAID / CREDITED - NO MINIMUM LIMIT VIDE NOTIFICATION 1 OF 2023 05.01.23. even exempted interest paid/ credited will require reporting. Only Jan Dhan account will remain out of reporting. - By: - DEV KUMAR KOTHARI - Income Tax - Dated:- 11-1-2023 - - The decision to abolish limit reporting of interest above zero: This seems a totally illogical and dilute system of always better control by way of ABC analysis too much and un-necessary control and reporting of petty sums will only burden all concerned and will not serve any purpose. Rather in view of petty sums reported, larger sums may be out of sight for action because new reported payees with p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etty sums will require monitoring. Recent Notification no. 1 of 2023 dt. 05.01.2023 S. 285BA -[ Obligation to furnish statement of financial transaction or reportable account] Notification No. 1 of 2023 05-01-2023 Notification No. 16/2021] [F.No. 370142/03/2021-TPL] of 12th March, 2021 Notification No. 2 of 2021 20 April, 2021 Notification No. 3 of 2018 5 th April, 2018 REPORTING REQUIREMENT EVEN IF ONE PAISA IS PAID: From notification dt. 05.01.2023: 4. The Remarks column at Annexure A is hereby being modified and may be read as The information is to be reported for all account/deposit holders where any interest exceeds zero per account in the financial year excludin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Jan Dhan Accounts . 5. In the View Of the changes mentioned above, the limit prescribed in Notification 2 of 2021 dated 20th April 2021 stands abolished and this addendum will come into effect from 05/01/2023 The notification is w.e.f. 05.01.2023 therefore it will apply to interest paid/ credited during FY 2022-23. The recent notification dt. 05.01.2023 is reproduced below with high lights added: Notification - Income Tax - 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. 1 of 2023 New Delhi, 05-01-2023 Addendum to Notification 2 of 2021: F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ormat Procedure and Guidelines for submission of Statement of Financial Transactions (SFT) for Interest income (Abolishing of limit of Rs 5,000/-). Section 285BA of the Income Tax Act, 1961 and Rule 114E requires specified reporting persons to furnish statement of financial transaction (SFT). 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 interest income. The Format, Procedure and Guidelines for submission of Statement of Financial Transactions (SFT) for Interest income was notified via Notification 2 of 2021 dated 20th April 2021 . 2. As per sub-rule (4)(b) of Rule 114E Director General of Income-tax (Systems) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall specify the procedures, data structures and standards for ensuring secure capture and transmission of data, evolving and implementing appropriate security, archival and retrieval policies, 3. The Remarks column point 1 at Annexure A- Guidelines for Preparation of Statement of Financial Transactions (SFT) mentioned The information is to be reported for all account/deposit holders where cumulative interest exceeds Rs 5,000/ per person in the financial year . 4. The Remarks column at Annexure A is hereby being modified and may be read as The information is to be reported for all account/deposit holders where any interest exceeds zero per account in the financial year excluding Jan Dhan Accounts . 5. In the View Of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he changes mentioned above, the limit prescribed in Notification 2 of 2021 dated 20th April 2021 stands abolished and this addendum will come into effect from 05/01/2023 (Govind Lal) DGIT (Systems)-2, CBDT The aforesaid remarks column before amendment is as follows: Remarks 1. The information is to be reported for all account/deposit holders where cumulative interest exceeds ₹ 5,000/per person in the financial year. 2. Interest which is exempt from tax under the Income-tax Act, 1961 such as interest on Public Provident Fund (PPF) Account, Foreign Currency Nonresident (FCNR) Account, Sukanya Samriddhi Account, Resident Foreign Currency Account etc . need not be reported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 3. While reporting the interest amount, deduction of ₹ 10,000/available under section 80TTA should not be reduced from interest amount paid/credited. 4. In case of joint account, the interest paid/credited should be assigned to the first/primary account holder or specified assigned person as per Form 37BA. 5. In case of minor being the account holder, the information to be reported in the name of Legal Guardian. 6. Separate report is required to be submitted for each account type (i.e. S-Savings, T-Time Deposit, R-Recurring Deposit, O-Others) and Interest on same account type is required to be aggregated in the report. 7. Interest will be the total amount of Interest paid/credited during t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he financial year. The new remarks column will be The information is to be reported for all account/deposit holders where any interest exceeds zero per account in the financial year excluding Jan Dhan Accounts . Therefore , all interest paid, or credited will have to be reported, except interest on Jan Dhan accounts. Which account continue to be eligible for treating as Jan Dhan account will also be a debatable issue. Even exempted interest paid / credited as mentioned in old remarks will have to be reported. 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