SFT and AIS: Why a Property Purchase Shows in Your Tax Records
A few months after a flat is registered, the purchase appears in the buyer's income tax records, although the buyer never reported it. The entry comes from the registration office, which sends details of larger property deals to the Income Tax Department every year. This guide explains what is reported, where a Bangalore buyer sees it, how to check the entry and which papers to keep.
What the Statement of Financial Transactions Is
The statement of financial transactions, or SFT, is a yearly report that certain bodies file with the Income Tax Department. Banks, mutual funds, companies and registration offices each report specific high-value dealings of their customers. The department uses the reports to match what people spend and invest with the income they declare.
The duty came from section 285BA of the Income-tax Act, 1961 and rule 114E. From 1 April 2026 it is section 508 of the Income-tax Act, 2025, read with rule 237 of the Income-tax Rules, 2026. The statement is now filed in Form No. 165.
Which Property Deals Are Reported
For immovable property, the report is filed by the registration department: the Inspector-General of Registration, the registrar or the sub-registrar. Buyers and sellers file nothing for this purpose. Under rule 237, these transactions are covered:
- A purchase or sale of immovable property
- A gift of immovable property
- A joint development agreement
A deal is reported when the amount, or the value adopted for stamp duty, is Rs. 45 Lakhs or more. In Karnataka the stamp duty value is the guidance value, so a flat priced a little under the limit is still reported if its guidance value reaches it. The statement for a financial year is due by 31 May of the following year.
The limit before April 2026
For deals registered up to 31 March 2026, the limit was Rs. 30 Lakhs and the report was known by its code, SFT-012. A flat registered in the financial year 2025-26 for Rs. 35 Lakhs was therefore reported, while the same deal after April 2026 falls below the new limit. Most apartment purchases in Bangalore are above both figures.
Where the Entry Shows Up
The reported details reach the Annual Information Statement, or AIS, which every taxpayer can open on the income tax e-filing portal. The AIS brings together what third parties have reported against a PAN, from salary and bank interest to share trades and property deals. A shorter version, the Taxpayer Information Summary, groups the same data under heads used in the return.
Timing explains why the entry seems to arrive late. The registration office reports once a year, after the financial year closes. A flat registered in June 2026 is therefore likely to appear only after the statement due on 31 May 2027 is processed.
What the entry contains
The entry usually carries the reporting office, the date of the document, the transaction value and the stamp duty value, with the PAN of each party. Where there are joint owners, the way the value is shown against each PAN deserves a close look. The full value is sometimes shown against every co-owner.
Other Records Created by the Same Purchase
The registrar's report is one of several trails a purchase leaves, and they should agree with each other. The main ones are as follows:
| Record | Who creates it | When it applies |
|---|---|---|
| Statement of financial transactions | Registration department | Price or stamp duty value of Rs. 45 Lakhs or more |
| 1% tax deducted at source | Buyer, on Form 141 | Price or stamp duty value of Rs. 50 Lakhs or more, resident seller |
| Tax deducted on a purchase from a non-resident | Buyer | Any value |
| Home loan interest and repayment | Lender's certificate | Every year of the loan |
| Capital gains | Seller's return | Year of sale |
The tax deducted by the buyer appears in the seller's records as a credit and in the buyer's as a deduction made. When the price in the registrar's entry and the price in the buyer's tax deduction form differ, the records show a mismatch that may need explaining. Using the same figures in the sale deed and the form avoids this.
Does the Entry Lead to Questions?
The entry by itself is routine, since every deal above the limit is reported. It becomes a question only when the purchase looks too large for the income and funds the buyer has disclosed. The department may then ask, usually online, how the property was paid for.
A buyer who paid through a home loan, savings, the sale of an earlier home or a gift from parents has a simple answer, provided the papers exist. Section 92(2)(m) also taxes a buyer when the price is well below the stamp duty value, so both figures in the entry matter. Cash paid outside the deed is the case this reporting is built to catch.
How to Check and Correct the Entry
The AIS is worth opening before the return for the year of purchase is filed, and again the following year. These steps cover the check:
- Log in to the e-filing portal and open the Annual Information Statement for the financial year of registration.
- Find the property entry in the SFT section and compare the value, date and PAN with the sale deed.
- Where the home is jointly owned, see how the value is shown against each owner.
- Use the feedback option beside the entry if something is wrong.
The feedback choices include that the information is correct, is partly wrong, relates to another PAN or year, or is a duplicate. For registrar entries, the feedback goes back to the reporting office for confirmation. The original value and the value after feedback are then shown side by side.
Papers to Keep
A single folder for the purchase answers almost any later query. It should hold these papers:
- The registered sale deed and the agreement for sale
- The home loan sanction letter and the disbursement statements
- Bank statements showing each payment to the seller or developer
- A gift deed or a signed letter, with the donor's bank statement, for money received from family
- Sale documents and the capital gains working for any earlier property sold to fund the purchase
- The tax deduction form and the certificate given to the seller
Taxpayers with total income above Rs. 1 Crore also list immovable property in the assets schedule of the return. The cost shown there should match the deed. Our EMI calculator helps to plan the loan and own funds, so the split is clear from the start.
For Sellers and NRIs
The same report carries the seller's PAN, so a sale appears in the seller's AIS as well. A seller is expected to show the capital gain in the return for that year, even when an exemption brings the tax to nil. The stamp duty value in the entry is the figure the department compares with the declared sale price.
Non-resident buyers and sellers are reported in the same way when their PAN is on the deed. Our NRI page explains how we help overseas buyers with the paperwork from abroad.
