Filing of Form 61A was required to be filed last year also but the penal provision has made it more important. Late filing and default in filing or filing in accurate statement attracts heavy penalties. Maximum penalties are not prescribed as per Income Tax Rules but penalty per day Rs.500/- and Rs 100/- is very high. That is why analysing and filing of Form 61A is very important. Here are salient features of Form 61 so far as nature of transactions to be covered and filing requirements as per the statute.
I. STATUTORY
REQUIREMENT TO FILE FORM 61A
Section 285BA (1)
of Income Tax Act 1961 requires specified reporting persons to furnish
statement of Financial Transactions. Rule 114E of Income Tax Rules, 1962 specifies
that statement of financial transactions as required to be furnished under
section 285BA (1) of Income Tax Act 1961 shall be furnished in Form 61A only.
II. TRANSACTIONS TO BE REPORTED IN FORM 61A
Further Rule 114E
of Income Tax Rules, 1962 specifies 13 classes of transactions that are
required to be reported in Form 61A pursuant to the requirements of section
285BA (1). This list of specified transactions is not hereby reproduced for the
purpose of maintaining brevity
(Refer our
previous article “Form 61A: Specified Financial Transactions due date 31st
May 2018, its applicability, Penalty & Procedure” published on our website
on 29 May 2018).
III. ASSESSEES WHO
ARE LIABLE TO TAX AUDIT U/S 44AB ARE ALSO REQUIRED TO FILE FORM 61A
a.
Earlier under
Annual Information Report (AIR) Regime, tax auditees covered u/s 44AB were not
required to file AIR.
b.
However, as per
Rule 114E of Income Tax Rules 1962, Tax Auditees covered u/s 44AB are expressly
required to file Form 61A in case they have registered a reportable transaction
during the relevant FY i.e. FY 2017-18.
IV. IN DEPTH ANALYSIS OF REQUIREMENT TO FILE FORM 61A
BY TAX AUDITEES COVERED U/S 44AB.
Base Rule: As
per Rule 114E, if a tax auditee covered u/s 44AB of Income Tax Act 1961
receives cash payment exceeding Rs. 2 Lakhs for sale of goods or services of
any nature then, such a person shall be liable to report such transaction in
Form 61A.
AGGREGATION CASH
RECEIPTS FROM A PARTY DURING THE YEAR IS IRRELEVANT
Requirement to file Form 61A shall not arise even if
cash receipts in aggregate exceeding Rs. 200000/- has been recorded by a person
during a FY. Cash receipts has be examined transaction wise against each
invoice to see whether cash exceeding Rs. 200000/- has been recorded against a
sale invoice for an amount exceeding Rs. 200000/-.
ANALYSIS: A person who is liable to tax audit u/s 44AB shall
required to file Form 61A only if he has received cash exceeding Rs. 200000/- against
as sale invoice for an amount exceeding Rs. 200000/-
|
S. No.
|
Nature & Particulars of Transactions
|
Requirement to
file Form 61A
|
|
1
|
Each sale bill below Rs.2 lakhs and aggregate sale during
the year to a party below Rs.2 lakhs
|
Not Required
|
|
2
|
Each sale bill below Rs.2 lakhs and aggregate sale during
the year to a party above Rs.2 lakhs
|
Not Required
|
|
3
|
Any of the sale bill to a party above Rs.2 lakhs but all
receipts from the party are by way of cash.
|
Required
|
|
4
|
Any of the sale bill to a party above Rs.2 lakhs but all
receipts from the party are through banking channel like ECS / NEFT / RTGS /
Account payee crossed cheque or draft
|
Not Required
|
Note: Where any of the sale bill to a party is above Rs.2 lakhs
but the receipts are mix of both cash
and through banking channel then the receipts
are to be appropriated sequentially to the earliest bill and in that manner
the receipt of cash for bills above Rs.2 lakh is to be identified for reporting
in SFT.
REQUIREMENT
TO FILE FORM 61A IN CASE OF RECOVERY FROM DEBTORS OUTSTANDING AS ON 1ST
DAY OF FY
a.
In case of
recovery from debtors for an amount exceeding Rs. 200000/- in cash then for the
purpose of determining requirement to
file Form 61A it has to be examined whether there existed any sale invoice for
an amount exceeding Rs. 200000/- in the relevant year when actual sale was made
to the said debtor.
b.
If there exists
any sale invoice for an amount existing Rs. 200000/-, then it has to be
examined whether cash payment exceeding Rs. 200000/- has been received against
this sale invoice. Reporting
requiremrent of Form 61A shall arise only if cash exceeding Rs. 200000/- has
been received against a particular
invoice for an amount exceeding Rs. 200000/-
CONCLUSION:
From the above
discussion it can be concluded that reporting requirement under Form 61A shall
arise only if there is a cash receipt exceeding Rs. 200000/- against a
particular invoice form an amount exceeding Rs. 200000/-.
Contributed by: Mr Tanveer Alam at Sandeep Ahuja & Co
