Comment whether the following transactions undertaken during the financial year 2025-26, are required to be reported under the Statement of…
CA Final · Direct Tax Laws and International Taxation · RTP · November 2026
Comment whether the following transactions undertaken during the financial year 2025-26, are required to be reported under the Statement of Financial Transaction or Reportable Account as required u/s 285BA of the Income-tax Act, 1961. Please give your answer alongwith suitable reasons and Category of Reporting Person. (a) Mr. Arihant purchased five bank drafts of ₹ 6 lakh each from his current A/c with State Bank of India, Kanpur; (b) Ms. Qatar made two-time deposits with Canara Bank, Faridabad – (i) A time deposit of 8.5 lakhs made on 07-08-2025 and (ii) Renewal of Time deposit of 5 lakhs originally made on 1.1.2025 and renewed on 1.1.2026; (c) Ms. Chetna made following payments in respect of credit card payments- For the months of April to July, 2025 ₹ 21,500 for each month, in cash For the months of Aug. to Dec., 2025 ₹ 55,500 for each month, through bank A/c For the months of Jan to Mar, 2026 ₹ 12,300 for each month, in cash (d) Mr. Zahir purchased garments of 1.9 lakhs in cash from M/s Arnav Designers on the occasion of his marriage. M/s Arnav Designers is liable for audit u/s 44AB of the Income-tax Act, 1961.
Suggested Answer and Working Notes:
17. (a) State Bank of India, Kanpur, is not required to report value of bank drafts purchased by Mr. Arihant, even though aggregate value of such bank drafts i.e., 30 lakhs, exceed ₹ 10 lakhs in the F.Y. 2025-26, since such bank drafts are purchased from his current A/c and not in cash. (b) Canara Bank, Faridabad is not required to report time deposits made by Ms. Qatar, since the value of time deposits other than time deposit renewed on 1.1.2026 is only ₹ 8.5 lakhs, and hence, does not aggregate to ₹ 10 lakhs or more in the F.Y.2025-26. (c) The bank or institution issuing credit card is required to report cash payment made by Ms. Chetna in respect of credit card, since aggregate cash payments of ₹ 1,22,900 (₹ 21,500 x 4 + ₹ 12,300 x 3) exceeds ₹ 1 lakh in the F.Y.2025-26. However, payment of ₹ 55,500 for each month from August 2025 to December 2025 need not be reported by such bank or company or institution since, aggregate value of such transactions, being ₹ 2,77,500, is less than ₹ 10 lakhs. (d) Payment of 1.9 lakhs by Mr. Zahir is not required to be reported by M/s Arnav Designers, since receipt of cash payment against sale of garments from Mr. Zahir does not exceed 2 lakhs.
Topics: Miscellaneous Provisions
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