New transactions included in SFT reporting for income from listed securities | Now get Pre filled ITR

written by Income tax Expert | March 14, 2021

SFT i.e. specified financial transactions are covered under section 285BA and various specified transactions are covered under rule 114E of the Income tax rules which needs to be reported by Specified person.

With various updates in Form 26AS which is now Annual information statement, SFT transaction is also a part of Form 26AS.

Also, during Budget 2021 speech our Hon’ble Finance minister had mentioned that there will be pre-filled Income tax return containing details about salary, dividend, interest and capital gain income and to move in that direction a new notification has been issued by CBDT i.e. notification 16/2021 Dt. 12.03.2021 which is as under:

“(5A) For the purposes of pre-filling the return of income, a statement of financial transaction under subsection (1) of section 285BA of the Act containing information relating to capital gains on transfer of listed securities or units of Mutual Funds, dividend income, and interest income mentioned in column (2) of Table below shall be furnished by the persons mentioned in column (3) of the said Table in such form, at such frequency, and in such manner, as may be specified by the Principal Director General of Income Tax (Systems) or the Director General of Income Tax (Systems), as the case may be, with the approval of the Board, namely:—

S. No. Nature of Transaction Class of person
1.         Capital gains on transfer of listed securities or units of

Mutual Funds

 (i) Recognised Stock Exchange;

(ii) depository as defined in clause (e) of sub-section (1) of section 2 of the Depositories Act, 1996 (22 of 1996);

(iii) Recognised Clearing Corporation;

(iv) Registrar to an issue and share transfer agent registered under subsection

(1) section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992).
2.         Dividend income A company
3.         Interest income (i) A banking company or a co-operative bank to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act);

(ii) Post Master General as referred to in clause (j) of section 2 of the Indian Post Office Act, 1898 (6 of 1898).

(iii) Non-banking financial company which holds a certificate of registration under section 45-IA of the Reserve Bank of India Act, 1934 (2 of 1934), to hold or accept deposit from public.

Explanation. — For the purposes of this rule,—
(a) “listed securities” means the securities which are listed on any recognised stock exchange in India;
(b) “Mutual Fund” means a Mutual Fund as referred to in clause (23D) of section 10 of the Act;
(c) “recognised clearing corporation” shall have the same meaning as assigned to it in clause (o) of sub regulation (1) of regulation 2 of the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2012 made under the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and the Securities and Exchange Board of India Act, 1992 (15 of 1992);
(d) ―recognised stock exchange‖ shall have the same meaning as assigned to it in clause (f) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956);
(e) “securities” shall have the same meaning as assigned to it in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956);‖”

 

Thus, from the above new rules it is clear that this amendment has been done to implement the vision mentioned in Budget 2021 and now people will get prefilled ITR with capital gain, dividend and interest income.

However it is important to mention here that capital gain of only listed entities shall be required in SFT and not all entities.

 

To read notification 16/2021 CLICK HERE.