CBDT removed limit of Rs. 5,000 for submission of SFT in relation to interest income

Notification no. 1 of 2023, dated 05-01-2023

The Statement of Financial Transaction (SFT) provides a reporting mechanism wherein specified entities are required to provide information about material financial transactions to the Income-tax Dept.

For the purpose of pre-filing the return of income, the Central Board of Direct Taxes (CBDT) has issued a notification no. 16/2021, dated 12-03-2021 to include reporting of interest income.

Subsequently, vide Notification no 2 of 2021, dated 20-04-2021, the board provided format, procedure, and guidelines for submission of SFT for interest income by the banking company or a Co-op. Bank, Post Master General, and NBFCs.

As per the said notification, `reporting in SFT is required for all account/deposit holders where the cumulative interest exceeds Rs 5,000 per person in the financial year.

Now, the board has modified this reporting requirement to abolish the limit of Rs. 5,000. As per the modified reporting requirement, all account/deposit holders where any interest exceeds zero per account in the financial year must be reported. However, this will exclude Jan Dhan’s Accounts.

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