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Annual reporting of high value transactionsNo. of comments:12 Kumaraswamy C V, Bangalore, Ancaps On 06-Aug-2020

I am kumaraswamy c v, MFI from Bangalore. I am also a Chartered Accountant by qualification. I need your support and intervention to address an industry grievance by highlighting through our Wealth Forum platform. As per the CBDT directives all SFT transactions above certain limits have to be reported Annually to Income Tax department by all AMCs. The same data will be reflected in 26AS. Many of our HNI investors are facing issues with regard to method of reporting the details of High value transactions by AMCs to Income tax authorities. This issue is for F Y 2019-20, A Y 2020-21. The related details were filed only a month back. The issue is, where the holding pattern is either or survivor, same investment details are appearing for all the holders, in Form 26 AS. For eg: A and B are husband and wife, Invested 1 Cr during F Y 2019-20 in a Liquid fund. Mode of holding is Either or Survivor. In Form 26 AS, it shows 1cr for A and 1cr for B. It shows as if the investment is done in their respective name as single and the number of parties as 1. This sort of duplication creates difficult situation for the HNI Investors to prove to the authorities as single Investment. I did some validation exercise and checked with two more senior Advisors, Mr. K.Arun Kumar and Mr.Y.Sridhar. They both checked the data and confirmed that it has happened in their cases also. It has happened with all AMCs. This issue was not there in earlier years. I think after the Department has upgraded their software this has cropped up. I request you to kindly download 26AS of your’ s own for A Y 2020-21 and check. Definitely you will notice this anomaly. Only two options. Either the data submission should be restricted to First holder name or to inform CBDT that they should capture only First holder details. As the data is already furnished, it may require immediate action. Otherwise based on erroneous 26AS, Tax authorities will act. As you know that in days to come all Assessment procedures will be Digital, faceless and Non-physical. This issue leads to mounting of Notices by the department and too much of harassment for Investors. Since this is an industry problem I felt Wealth forum is the best platform to project it.

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Comments Posted

Vignesh Kumar. T ARN NO :VM IMVESTMENT MANAGERS Coimbatore, 07 Aug 2020

Mr. Kumaraswamy, your experience is much valid, in fact this discrepency was there previously also. Over and above the funniest part is if a client invest Rs. 1 Crore in liquid fund and then switch same amount to another fund in the same FY then the investment in his name would be reported as Rs. 2 Crores instead of actual Rs. 1 Crore. Hope this also needs to be addressed.

Mahesh Kumar Madan ARN NO :20619 Faridabad , 07 Aug 2020

Yes I am also facing same problem. I mailed to concerns AMCs but not responding satisfactory answer please anyone suggest for rectification/delete

Sandeep Gandhi ARN NO :Mega Financial Planners Rajkot, 07 Aug 2020

This type of errors have happened in past also. My suggestion to AMC is that they should send the details with the first holder only and it is legitimate as from the Income Tax point of view the ownership is important!!

Manu Jain ARN NO :92017 Mutual Cafe Amritsar, 07 Aug 2020

In my view this is not a new issue this has been an old practice of the department where the second holder gets the letter from the department as an investment done by the second holder but later when we produce the statement showing that the investment is done by the first holder the same stands nil in second holders case, but this practice of getting the letter to the second holder should not be their in my opinion the AMC should not disclose second holders pan in case of investment done in either or survivor mode

Kapil Khurana ARN NO :Kapil Khurana Financial And Ri Amritsar, 07 Aug 2020

This anomaly exists since AIR is created. I had personally approached Commissioner Income Tax in my region for this correction and he feels helpless in this regard. This problem can only be solved with intervention of CBDT

Kapil Khurana ARN NO :Kapil Khurana Financial And Ri Amritsar, 07 Aug 2020

BIBHUTI BHUSAN DASH ARN NO :90876-LOTUSMINT ADVISORS PVT. BHUBANESWAR, 07 Aug 2020

ALL HAVE COMMENTED THE EXACT PROBLEMS, BUT AM SURE R& T PROVIDES DATA ON THE INSTRUCTIONS OF AMC. WE NEED TO CHECK WITH AMC, WHAT ARE THE GUIDELINES BY CBDT TO AMC, AND WHAT EXACTLY THEY INTIMATE TO RESPECTIVE R & T.

Babu ARN NO :10520 Bangalore, 07 Aug 2020

Very good initiative Kumaraswamy Sir. Thanks for the same. Yes it is an issue to be resolved ASAP. As Money Kare Srini has mentioned, we have faced this issue earlier also. Request WF to take it up with AMCs immediately and help industry.

Ramesh B ARN NO :11864 Vadodara, 06 Aug 2020

such undue disclosure will discourage many investors/savers fearing scrutiny. they will have to consult CA even for smaller amounts, if reported as above.

Lalit Somani ARN NO :2334 HYDERABAD, 06 Aug 2020

To all MFD fraternity, Mr kumarswamy has bought an very valid point. It is really going to hell lot of exercise to explain. I do fully agree with suggestion that either the data feed to CONCERNED dept should be only of/as the first holder.

Srini ARN NO :Money Kare Chennai, 06 Aug 2020

Hi Sir, earlier years this issue did crop up but later it was taken up with Cams and rectified. May be again may be as indicated by you there are some changes in the software which might have again triggered this. I think we need to address it to the registrars too as they are the one who give the data. As last time when this cropped up many years ago the Income tax officer said they used the data just as given by the R&T.

VINOD J KOTAK ARN NO :2089 MUMBAI, 06 Aug 2020

Yes this can lead to lot of difficulties for assesses, not only for mutual fund related investments but same issue will come up for bank deposits etc.Ist holder is the actual investor joint holders are for convenience sake .This anomaly should be be rectified by CBDT.