CBDT Notifies SFT Norms for RTAs Reporting Mutual Fund Transactions Under IT Act, 2025

Reports coming in for today mention that The Central Board of Direct Taxes (CBDT) has notified a detailed framework for reporting mutual fund transactions through Statement of Financial Transactions (SFT-2518). The framework, issued through Notification No. 2 of 2026 dated September 10, 2026, is aimed at facilitating the pre-filling of capital upside, income and loss from mutual fund transactions in income-tax returns. The notification has been issued under Section 508(1) of the Income-tax Act, 2025, read with Rule 237(6) of the Income-tax Rules, 2026.

RTAs to report mutual fund transaction data

The framework applies to Registrar and Share Transfer Agents (RTAs) registered under Section 12(1) of the SEBI Act, 1992. These reporting entities will have to prepare data files from their internal systems in the prescribed format and submit them through the SFTP server. A separate control statement must additionally be signed, verified and furnished by the Designated Director.

The SFT will be filed twice a year. Data for the first half of the financial year, ending September 30, will have to be furnished by October 31, while the statement for the second half, ending March 31, will be due by April 30.

How the framework will help taxpayers

A key objective is to use the Mutual Fund Transaction Summary for pre-filling upside, income or losses arising from mutual fund transactions. The reporting entities must additionally provide account holders with the mutual fund transaction information noted to the Income Tax Department, allowing taxpayers to reconcile it with their AIS before filing their returns.

For calculating capital upside, the framework prescribes the use of the First-in-First-out (FIFO) method to identify corresponding purchases and determine the holding period. Taxpayers will additionally be able to modify the estimated sale consideration and cost of acquisition before filing their returns.

Short-term and long-term classification

The prescribed framework sets different minimum holding periods for various mutual fund categories. Equity-oriented mutual fund units have a 12-month holding period, while other units have a 12-month period if listed and 24 months if unlisted, subject to the specified conditions for Specified Mutual Funds.

The reporting structure will capture details such as purchase and sale values, transaction charges, stamp duty, STT, dividend paid and closing value. Transaction-level data will include the security, units sold, estimated sale consideration, cost of acquisition and, where applicable, indexed cost and fair market value. Corrections and data security

The framework additionally provides mechanisms for correcting or deleting previously submitted information. Files failing prescribed validation checks can be rejected, while defects or inaccuracies must be addressed through correction or deletion statements. RTAs are additionally required to maintain appropriate information-security, archival and retrieval procedures.