India issues new SFT reporting guidelines for depository and mutual fund transactions

The Directorate of Income Tax (Systems) has issued new notifications outlining the format, procedures, and guidelines for submitting Statements of Financial Transactions (SFT) to facilitate the pre-filling of income-tax returns.

One notification (SFT-2517) addresses depository transactions, requiring reporting persons, such as depositories, to furnish information regarding capital gains on the transfer of listed securities or mutual fund units.

A second notification (SFT-2518) focuses on mutual fund transactions by Registrar and Share Transfer Agents (RSTA). Registered RSTAs must prepare prescribed data files and submit them via an SFTP server. These reports must be submitted half-yearly: for the period ending September 30, the deadline is October 31, and for the period ending March 31, the deadline is April 30.

Reporting entities are also required to provide transaction information to account holders to assist with reconciliation against the Annual Information Statement (AIS) and must maintain strict information-security and archival policies.