Understand Section 285BA high-value transaction thresholds, AIS reporting, mandatory ITR filing rules and consequences for FY 2026-27 and AY 2027-28.
Section 285BA of the Income-tax Act, 1961 places an information-reporting obligation on banks, mutual funds, registrars, depositories, and credit card issuers. As of FY 2026-27, the Annual Information Statement (AIS) and Form 26AS now combine these Statement of Financial Transaction (SFT) reports into a single live ledger of your high-value spends, deposits and investments. If a transaction crosses a prescribed threshold, the CBDT expects you to either file a return or explain the source — silence is no longer a safe option.
What counts as a high-value transaction
Reporting entities flag specified transactions when aggregate values during a financial year cross CBDT thresholds. The most common triggers Indian taxpayers see in their AIS are:
- Cash deposits aggregating ₹10 lakh or more in savings accounts in a year
- Cash deposits or withdrawals of ₹50 lakh or more in current accounts
- Fixed deposits aggregating ₹10 lakh or more (other than renewals)
- Credit card payments of ₹1 lakh in cash or ₹10 lakh by any other mode in a year
- Purchase of immovable property valued at ₹30 lakh or more
- Purchase or sale of shares, bonds, debentures or mutual fund units aggregating ₹10 lakh or more
- Foreign currency sales (cards, drafts, travellers cheques) aggregating ₹10 lakh or more
Why mandatory return filing now applies
Under the seventh proviso to Section 139(1), an individual whose income is otherwise below the basic exemption must still file a return if specified high-value transactions are undertaken. Combined with Union Budget 2026's tightening of AIS-based scrutiny, even pensioners and homemakers with no taxable income can be required to file. The newer trigger list includes electricity bills above ₹1 lakh and foreign travel spends above ₹2 lakh.
How AIS, TIS and the new ITR forms tie it together
The AIS shows raw reported data; the Taxpayer Information Summary (TIS) shows the income figure the system has derived; the ITR utility now pre-fills both. If a high-value transaction appears in your AIS but is not reflected in your return, the CBDT's risk-management engine flags the mismatch. You should download the AIS for AY 2027-28 well before filing, raise feedback on incorrect entries, and reconcile every flagged line item.
Consequences of ignoring SFT entries
Non-filing where the seventh proviso applies attracts a penalty under Section 234F plus interest, and the assessing officer can invoke best-judgment assessment under Section 144. In serious cases of cash deposits without explainable source, Sections 68 and 69A bring the amount to tax at 60% under Section 115BBE, plus surcharge, cess and penalty — taking the effective burden well above 75%.
Best practices for FY 2026-27
- Reconcile AIS, TIS and bank statements every quarter — not at the last minute
- Submit AIS feedback online to correct duplicate or wrongly attributed entries
- Keep gift deeds, loan confirmations and sale agreements ready to evidence the source of funds
- File a return even if income is below ₹3 lakh when any seventh-proviso trigger is met
Conclusion
High-value transaction reporting under Section 285BA has matured into a real-time taxpayer surveillance layer. Treat your AIS as the single source of truth, reconcile every flagged line, and file your return on time. Doing so closes the door on avoidable notices and penalties for AY 2027-28.
