Annual Information Return (AIR) – Complete Details

Annual Information Return (AIR) – Complete Details. Check Income TAX AIR Details, Find Complete details regarding Annual Information Return (AIR). In this article you can find everything related to Annual Information Return (AIR) like – Introduction of Annual Information Return (AIR),  Basic Provisions of Annual Information Return, Detail of Persons required to file statement of financial transaction or reportable account, The periodicity and due date of furnishing statement of financial transaction or reportable account, What is annual information return etc. Recently we provide complete details for TDS on Sale of Property . Now you can scroll down below and check complete details regarding “Annual Information Return (AIR) “

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Annual Information Return (AIR)

To keep a watch on high value transactions undertaken by the taxpayer, the Income-tax Law has framed the concept of statement of financial transaction or reportable account (previously called as ‘Annual Information Return (AIR)’.With the help of the statement the tax authorities will collect information on certain prescribed high value transactions undertaken by a person during the year. Statement of financial transaction or reportable account is to be filed by certain prescribed entities (discussed later), and in such statement they are required to furnish the details of specified financial transactions or any reportable account registered/recorded/maintained (discussed later) by them during the year. Thus, on the basis of the information provided by certain prescribed entities in statement of financial transaction or reportable account, the Income-tax Department keeps a track of specified financial transactions carried on by a person during the year. In this part you can gain knowledge on various provisions relating to statement of financial transaction or reportable account

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Basic provisions

As per Section 285BA of the Income Tax Act, 1961 (as substituted by Finance Act, 2014 w.e.f 01-04-2015), specified entities (Filers) are required to furnish a statement of financial transaction or reportable account (hereinafter referred to as ‘statement’) in respect of specified financial transactions or any reportable account registered/recorded/maintained by them during the financial year to the income-tax authority or such other prescribed authority.

The rules for filing of Statement of Financial Transactions and Reportable Accounts are yet to be notified

Persons required to file statement of financial transaction or reportable account

Following persons shall be required to furnish statement of financial transactions or reportable accounts registered or recorded or maintained by them during a financial year to the prescribed authority:

• (a) an assessee;
• (b) the prescribed person in the case of an office of Government;
• (c) a local authority or other public body or association;
• (d) the Registrar or Sub-Registrar appointed under section 6 of the Registration Act, 1908 (16 of 1908);
• (e) the registering authority empowered to register motor vehicles under Chapter IV of the Motor Vehicles Act, 1988 (59 of 1988);
• (f) the Post Master General as referred to in clause
• (j) of section 2 of the Indian Post Office Act, 1898 (6 of 1898);
• (g) the Collector referred to in clause
• (g) of section 3 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (30 of 2013);
• (h) the recognised stock exchange referred to in clause (f) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956);
• (i) an officer of the Reserve Bank of India, constituted under section 3 of the Reserve Bank of India Act, 1934 (2 of 1934);
• (j) a depository referred to in clause (e) of sub-section (1) of section 2 of the Depositories Act, 1996 (22 of 1996); or
• (k) a prescribed reporting financial institutions

Note: The Board may prescribe different values for different transactions in respect of different persons having regard to the nature of such transactions. However, the aggregate value of such transactions during a financial year shall not be less than Rs. 50,000

* The rules prescribing the nature of transactions and their value for filing of Statement of Financial Transactions and Reportable Accounts are yet to be notified

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The periodicity and due date of furnishing statement of financial transaction or reportable account

Statement of financial transaction or reportable accounts shall be furnished for such period, within such time and in the form as may be prescribed*.

However, section 285BA(5) empower the tax authorities to issue a notice to the person who had not filed the statement within prescribed time. In such a case, the tax authorities may serve upon such person a notice requiring him to furnish the statement within a period not exceeding 30 days from the date of service of such notice and in such a case the person shall furnish the statement within the time as specified in the notice.

*The rules for filing of Statement of Financial Transactions and Reportable Accounts are yet to be notified.

Consequences of not furnishing statement of financial transaction or reportable account

Non-furnishing of statement of financial transaction or reportable account will attract penalty under section 271FA. Penalty can be levied of Rs. 100 per day of default.

However, section 285BA(5) (as discussed earlier) empower the tax authorities to issue a notice to the person directing him to file the statement within a period not exceeding 30 days from the date of service of such notice and in such a case person shall furnish the statement within the time specified in the notice. If person fails to file the statement within the specified time, then a penalty of Rs. 500 per day will be levied from the day immediately following the day on which the time specified in such notice for furnishing the statement expires

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Inaccurate or defective statement of financial transaction or reportable account

If any person, after filing the statement, comes to know or discovers any inaccuracy in the information provided in the statement, he shall inform such inaccuracy to the prescribed income-tax authority within a period of ten days and furnish the correct information in such manner as may be prescribed.

On the other hand, the prescribed income-tax authority may also intimate the defect to the person and give him an opportunity of rectifying the defect within a period of thirty days from the date of such intimation or within such extended period as may be allowed by prescribed income-tax authority.

However, if a person fails to rectify the defect within the said period than such statement shall be treated as an invalid statement and the provisions of this Act shall apply as if such person had failed to furnish the statement.

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Consequences of filing inaccurate or defective statement of financial transaction or reportable account

As per section 271FAA of the Income-tax Act, if a prescribed reporting financial institution referred to in Section 285BA(1)(k) who is required to furnish statement of financial transaction or reportable account, provides inaccurate information in the statement, and where:

(a) the inaccuracy is due to a failure to comply with the due diligence requirement prescribed* under section 285BA(7) or is deliberate on the part of that person;

(b) the person knows of the inaccuracy at the time of furnishing the statement but does not inform the prescribed income-tax authority or such other authority or agency;

(c) the person discovers the inaccuracy after the statement is furnished and fails to inform and furnish correct information within a period of 10 days as specified under section 285BA(6),

then, the prescribed income-tax authority may direct that such person shall pay, by way of penalty, a sum of fifty thousand rupees.

*Rules in this regard are yet to be notified

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