How SFT filing errors by banks and mutual funds may impact taxpayers' income records

Officials said analysis of SFT filings has revealed frequent issues such as duplicate reporting of transactions, incorrect transaction values, and missing or wrong PAN details. These errors can reflect incorrectly in taxpayers’ Annual Information Statement (AIS), potentially leading to confusion during Income Tax Return (ITR) filing.

Under the Income Tax Act, a wide range of entities—including banks, NBFCs, post offices, forex dealers, sub-registrars, mutual fund trustees, and companies issuing dividends or buying back shares—are required to report specified financial transactions.

The due date for SFT filing for financial year 2025-26 is May 31, 2026.

According to officials, other common lapses include lack of reconciliation of transaction data before filing, weak internal checks, and delays in submission. Errors are more likely in cases involving joint accounts or jointly held investments, where values may be incorrectly captured.

“Such errors may lead to confusion or inconvenience for taxpayers,” an official said, as per PTI.

The tax department said reporting entities should strengthen validation of PAN details, reconcile transaction data internally, and conduct proper quality checks before submission to reduce mismatches.

SFT data flows into the Annual Information Statement (AIS), which consolidates financial information linked to a taxpayer’s PAN on the Income Tax portal. It includes details such as interest income, dividends, securities transactions, mutual fund investments, and property-related transactions.

Officials said AIS is intended to help taxpayers cross-check information while filing returns, but errors in SFT reporting can lead to mismatches that require correction or explanation during tax filing.

The department added that accurate reporting by institutions ultimately supports smoother tax compliance and reduces discrepancies for taxpayers, officials said.