Income tax department urges accurate SFT filing by reporting entities ahead of May 31 deadline

With only six days left to file the Statement of Financial Transactions (SFT) for FY26, the Income-tax Department has directed banks, mutual funds, and corporate entities to ensure flawless submissions to avoid errors in taxpayers' Annual Information Statements (AIS).

Written by FE Bureau

May 26, 2026 01:22 IST

SFT Filing Deadline Approaches: Tax Department Warns Reporting Entities Against Common Errors Affecting AIS

With the filing deadline for Statements of Financial Transactions (SFTs) just six days away, the Income-tax Department has called upon all reporting entities to ensure timely, accurate, and complete submissions of Statements of Financial Transactions (SFTs) for FY26.

Under the Income-tax law, the reporting entities are mandated to furnish details of specified high-value transactions, including interest payments, dividends, securities trades, mutual fund investments and property deals, to the Income-tax Department. The data populates taxpayers’ Annual Information Statement (AIS), which offers a consolidated, PAN-linked view of financial transactions and significantly simplifies the income-tax return (ITR) filing process. Reporting Entities, including banks, cooperative banks, mutual funds, companies, property registration authorities, foreign exchange dealers, and other notified institutions, serve as the backbone of this transparent system, officials stated.

Tax department officials stated that the quality of SFT reporting directly determines the effectiveness of the AIS. “The effectiveness of the AIS depends significantly on the quality of information reported. Even small mistakes in SFT filing can create avoidable difficulties for taxpayers,” an official said.

Common errors observed in previous filings include incorrect or missing PAN details, duplicate reporting of the same transactions, inaccurate transaction values (especially in joint accounts), inadequate internal reconciliation, insufficient pre-submission quality checks, and delays in filing.

While the framework has significantly improved transparency in the tax administration, the department has observed that the overall effectiveness of the AIS depends heavily on the quality of data reported.

The inaccuracies can lead to confusion for taxpayers and create unnecessary compliance challenges. To mitigate these issues, the department advises Reporting Entities to validate PAN information, reconcile internal transaction data, conduct thorough quality reviews, and submit filings well before the deadline.

This article was first uploaded on May twenty-six, twenty twenty-six, at twenty-two minutes past one in the night.