SFT Compliance: Navigating the Transparency Mandate
The government's goal is a "paperless and personless" audit. SFT returns are the primary source of data for the AIS (Annual Information Statement) of taxpayers. At Diwakar and Associates, we act as your technical filter, ensuring only accurate and verified data is transmitted to the authorities.
Who Must File SFT? (Reporting Entities)
- Under Section 285B and Rule 114E, the following entities have a mandatory reporting obligation:
- Corporates: If you engage in Share Buybacks, issue shares/debentures exceeding ₹10 Lakhs, or pay dividends.
- Real Estate Professionals/Registrars: For any property transaction valued at ₹30 Lakhs or more.
- Businesses & Professionals:If you receive Cash exceeding ₹2 Lakhs for the sale of goods or services of any nature.
- Financial Institutions: Banks, Co-operative banks, and NBFCs for credit card payments and high-value deposits/withdrawals.
Critical Transactions & Reporting Thresholds
We monitor your ledger using SFT Transaction Codes defined by the Directorate of Systems to ensure no transaction slips through the cracks.
Aggregation Rule
The system tracks aggregate value. Multiple small transactions (₹50,000 x 4) can cross ₹2 lakh threshold (SFT-011). Our system flags this automatically.
PAN/Aadhaar Verification
SFT reporting is invalid without verified identity. We perform bulk PAN-Aadhaar validation for all high-value transactions.
Joint Property Transactions
For real estate deals, we ensure accurate reporting for all parties based on latest 2026 compliance rules.
The 2026 "Zero-Error" Workflow
Even NIL returns are mandatory. Our workflow ensures 100% accurate and compliant filing.
1
Transaction Identification
Scan accounting systems to identify all transactions hitting SFT thresholds.
2
PAN/Aadhaar Validation
Perform bulk validation to avoid rejection due to incorrect identity details.
3
XML Generation
Convert data into secure XML format using the latest government utility.
4
Submission & Verification
Upload to reporting portal and secure acknowledgement (FTN number).
Risks of Non-Compliance
Delay in Filing
A penalty of ₹500 to ₹1,000 per day of default.
Inaccurate Information
Providing "inaccurate information" willfully carries a penalty of ₹50,000.
Notice Scrutiny
Failure to file SFT often leads to an "Inquiry before Assessment," causing unnecessary operational stress.
The Impact
We manage the end-to-end process of preparing and filing tax returns for individuals, firms, and corporations, along with all statutory tax forms.
Our Commitment to You
SFT is the primary trigger for Income Tax Scrutiny (CASS). At Diwakar and Associates, we provide a "Pre-Filing Reconciliation Report" that compares your SFT data against your GST returns and Bank Statements. We ensure your business remains "Low Risk" in the eyes of the government's AI.
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