CBDT has abolished the limit of interest income exceeding Rs 5,000 for the purpose of SFT reporting, vide Notification 1/2023, w.e.f. 05/01/2023. Now the information in SFT is required to even include details of account holders earning interest income upto Rs 5000 except for ‘Jan Dhan Account’ holders.
Such limit has been prescribed in CBDT Systems Notification 2/2021 dt. 20/04/2021 comprising of Format, Procedure and Guidelines for submission of SFT for Interest income.
Section 285BA read with Rule 114E requires specified persons to report interest transactions in Statement of Financial Transaction (SFT). For the purposes of prefilling the return of income (ITR), CBDT has issued Notification 16/2021 dated 12/03/2021 to include reporting of information relating to interest income.
Rule 114E(4b) prescribes that the Director General of Income-tax (DGIT Systems) 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. Accordingly, the Format, Procedure and Guidelines for submission of Statement of Financial Transactions (SFT) for Interest income was notified vide Notification 2/2021 (Systems) dated 20th April 2021.
Aforementioned Guidelines issued by the DGIT Systems requires reporting of all account/deposit holders where cumulative interest exceeds Rs 5,000 per person in a financial year. However, CBDT has modified the same. The limit of interest income exceeding Rs. 5000 has been abolished for the purpose of reporting requirements in SFT.
Revised guidelines on SFT reporting of interest income requires reporting of all account/deposit holders where any interest income exceeds zero per account, i.e. any amount, in a financial year excluding Jan Dhan Accounts.
CBDT Income Tax Notification 1/2023 (Systems) dt. 05/01/2023; Limit of Rs 5000 abolished for SFT Reporting of Interest Income