No aggregation for Reporting Cash Transactions under IT Rule 114E: CBDT Clarification

CBDT Clarification on Requirements of Reporting Cash Transactions under IT Rule 114E; No aggregation required

CBDT has clarified that reporting requirements under Rule 114E relating to submission of Statement of Financial Transactions (SFT) are applicable when a single transaction involves receipt of cash payment exceeding Rs. 2 lac for sale of goods or services, i.e. no aggregation is required. The norms of aggregation contained in sub-rule 3 of Rule 114E have been amended vide CBDT’s Notification No. 91/2016 dated 6th October, 2016 clearly indicating that the said transactions did not require aggregation.

CBDT Press Release dt. 22 Dec. 2016

Rule 114E of Income-tax Rules, 1962, for furnishing statement of financial transactions (SFT) came into force with effect from 1st April, 2016. Any person who is liable for audit under section 44AB of the Income-tax Act, 1961 is required to furnish a statement in respect of transaction at serial no. 11 of Rule 114E(2) relating to receipt of cash payment exceeding Rupees two lakh for sale of goods or service. Doubts were raised if such transactions are required to be aggregated for reporting.

The norms of aggregation contained in sub-rule 3 of Rule 114E have been amended vide CBDT’s Notification No. 91/2016 dated 6th October, 2016 clearly indicating that the said transactions did not require aggregation and the reporting requirement under SFT for this purpose is on receipt of cash payment exceeding Rupees two lakh for sale of goods or services per transaction.

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