CBDT Directs Banks, Mutual Funds to Ensure Error-Free SFT Filing by May 31, 2026

The Central Board of Direct Taxes (CBDT) has asked banks, co-operative banks, mutual funds, companies, property registration authorities and other reporting entities to complete Statement of Financial Transaction (SFT) filings for 2025–26 before the May 31 deadline, as per news reports. 

Under income tax rules, specified entities are required to report high-value financial transactions to the Income Tax Department.  

These include mutual fund investments, securities transactions, dividend payments, interest income, property transactions and foreign exchange dealings. 

Data Used in Annual Information Statement 

The information submitted through SFT filings is reflected in the Annual Information Statement (AIS) of taxpayers.  

The AIS contains financial transaction details linked to a taxpayer’s Permanent Account Number (PAN) and is available on the income tax portal. 

The department added that incorrect reporting may lead to mismatches in taxpayer records and create difficulties during return filing or verification. 

Errors Reported in Previous Filings 

According to reports, common issues seen in earlier SFT submissions included incorrect or missing PAN details, duplicate reporting of transactions, and inaccurate transaction values, especially in joint accounts. 

Other issues included delays in filing, weak internal reconciliation processes, and lack of proper quality checks before submission. The department stated that even small errors in reporting can affect the accuracy of information displayed in the AIS. 

Reporting Rules and Compliance Measures 

SFT filing requirements are governed under Section 285BA of the Income Tax Act, 1961, read with Rule 114E of the Income Tax Rules. The reporting framework is also continuing under the Income Tax Act, 2025. 

The Finance Ministry has advised reporting entities to verify PAN details, reconcile records internally, and conduct quality checks before filing submissions. Institutions have also been asked to review reporting systems to avoid last-minute errors. 

Read More: Why Taxpayers Must Verify AIS Before Filing ITR for FY27? 

Conclusion 

The Income Tax Department said it will continue stakeholder outreach and engagement programmes to improve reporting standards and compliance processes. Reporting entities have been advised to complete filings within the prescribed timeline ahead of the May 31 deadline. 

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