Section 285BA of ITA, 1961 : Section 285Ba: Obligation To Furnish Statement Of Financial Transaction Or Reportable Account

Explanation using Example

Imagine a scenario where XYZ Bank, a financial institution, has a client, Mr. A, who deposits an amount of INR 75,000 in his savings account. XYZ Bank, being a 'prescribed reporting financial institution' as per Section 285BA of the Income-tax Act, 1961, is responsible for maintaining records of such transactions.

Under Section 285BA, XYZ Bank must furnish a statement of this 'specified financial transaction' to the income-tax authorities, as it exceeds the minimum threshold of INR 50,000 set by the Act for reporting. The bank would need to submit this information within the time frame and in the format prescribed by the tax authorities, helping the government monitor and prevent tax evasion.