Annual Information Return (AIR): Format, Due Date, & Limit Â
Annual Information Return (AIR) is a significant compliance tool in India’s tax system aimed at reporting high-value financial transactions and bringing transparency to the economic system. This elaborate guide encompasses the whole annual information return or AIR, including its applicability, reporting, filing procedures, penalties, and transition to Statement of Financial Transaction (SFT).Â
What is Annual Information Return (AIR)?
Annual Information Return (AIR) is a return to be filed with the Income Tax Department by specified entities, reporting high-value financial transactions carried out during a financial year. The main goal is to observe and check black money and tax evasion by keeping a track of large-value financial transactions. AIR is required under Section 285BA of the Income-tax Act, 1961, and the character of transactions and entities to be reported is specified in Rule 114E of the Income-tax Rules.
Who is required to file AIR?
The filing of AIR is the responsibility of “specified persons” or institutions that record or register high-value transactions. These are:
- Banks and banking establishments
- Mutual funds
- Companies or institutions that issue credit cards
- Registrars or sub-registrars
- Entities that deal with bonds or debentures
- Companies that issue shares
The list of specified persons and the related transactions are clearly outlined in Rule 114E.
What Transactions Are To Be Reported?
AIR emphasizes reporting valuable transactions that might reflect substantial financial activity. Certain typical examples are:
- Cash deposits amounting to ₹10 lakh or more in a savings account within a year
- Credit card payments amounting to ₹2 lakh or more within a year
- Receipt by any individual of ₹2 lakh or above for purchasing mutual fund units
- Sale or purchase of immovable property worth ₹30 lakh or more
- Investments in debentures, bonds, or shares above predetermined limits
- The full set of reportable transactions is available in Rule 114E.
Purpose and Significance of AIR
The AIR system allows the Income Tax Department to:
- Identify concealed income and tax evasion
- Keep a database of high-value transactions
- Allow risk-based scrutiny and evaluation
- Improve taxpayer compliance and transparency
By reconciling reported transactions with individual tax returns, authorities can detect inconsistencies and act accordingly.
AIR vs. Statement of Financial Transaction (SFT)
The AIR has been rebranded to the Statement of Financial Transaction (SFT) or Reportable Account. Though the fundamental intent is the same, the name change indicates a wider scope and compliance with global norms of financial reporting.
Filing Process and Format
1. Preparation
Entities have to gather and compile all reportable transactions for the financial year. AIR is submitted in Form 61A, which has four parts:
- Part A: Statement-level data (applicable to all transactions)
- Part B: Financial transactions aggregated
- Part C: Taxpayer account-related data
- Part D: Transaction details of immovable property
2. Steps involved in filing, Download the file format of the prescribed data structure from the website of the Tax Information Network (TIN).
- Prepare the AIR either by third-party packages, in-house software, or the free AIR Preparation Utility (AIR RPU) available from NSDL.
- Check the file through the File Validation Utility (FVU) for accuracy.
- Upload the verified file through the NSDL portal.
- Complete Part A of Form 61A on paper and send a CD or pen drive with the electronic file to a TIN-Facilitation Centre.
3. Supplementary Information
In case of errors being detected or further transactions to be reported subsequent to initial filing, entities are allowed to file supplementary AIRs to correct or modify the information.
Due Dates
The due date for filing AIR (Form 61A) is 31st May of the financial year next to which the transactions were recorded.
Certain sources indicate the due date to be 31st August, but latest guidelines suggest 31st May.
Penalties for Non-Compliance
- Failure to file AIR attracts stringent penalties:
- ₹500 per day for every day of delay after the due date
- ₹1,000 per day for persistent failure after the extended date
These penalties emphasize the importance of timely and accurate reporting.
Charges for Filing
NSDL levies nominal charges for uploading AIRs at TIN Facilitation Centres, based on the number of records:
| Records Uploaded | Charges (₹) |
| Up to 100 | 38 |
| 101 – 1000 | 178 |
| Above 1000 | 578.50 |
Key Points to Remember
- It is possible to file only one AIR in a financial year, but additional information may be furnished where required.
- AIR has to be filed in the specified electronic form along with a signed paper-based verification.
- The data disclosed in AIR is cross-checked with the returns of the taxpayer to identify irregularities.
Recent Developments: Annual Information Statement (AIS)
The Annual Information Statement (AIS) extends the AIR/SFT system and informs taxpayers about all their reported transactions. AIS contains information on:
- Sale and purchase of securities
- Interest and dividend income
- Salary and foreign remittances
- Property transactions
Tax deducted at source (TDS)
Taxpayers can give feedback on reported transactions through AIS, making it more transparent and accurate.
Get Started with TaxDuniaÂ
The Annual Information Return (AIR) or the erstwhile Statement of Financial Transaction (SFT) is the stronghold of the Indian tax compliance system. High-value transaction reporting makes it more effective for the Income Tax Department to identify tax evasion and promote financial transparency. Organisations governed by Rule 114E need to be careful for reporting, comply with timelines, and file right to avoid penalties and work towards a healthy taxation regime.
