Tax Department Flags SFT Lapses at Karnataka Sub-Registrar Offices

The income tax department has raised concerns over compliance failures at several sub-registrar offices in Karnataka, including prominent ones at Byatarayanapura, Banashankari, Gandhinagar, Yelahanka, Basavanagudi and the BDA complex. At least 32 offices have been found to have missed their obligation to file Statements of Financial Transactions (SFTs) for high-value property deals relating to FY 2024-25.

Why the Reports Matter

Under law, sub-registrars are required to furnish details of immovable property transactions above ₹30 lakh through SFT filings by May 31 each year. These records feed directly into taxpayers’ Annual Information Statements (AIS) — the cornerstone of the department’s effort to encourage voluntary compliance and reduce intrusive enquiries.

Accurate filings help the system capture potential undervaluation of property, prevent leakage of tax revenue, and make it easier for taxpayers to reconcile their information before submitting income tax returns.

Scale of Non-Compliance

For FY 2024-25, the filing rate has slipped compared to last year. Officials said 33 sub-registrars had not uploaded the required information by the due date. The lapses cause avoidable hurdles for both taxpayers and authorities, including:

• delays in AIS updates for property buyers and sellers
• mismatches that may trigger disputes in return filings
• loss of potential revenue to the exchequer

In a recent communication, the department noted:

“Failure to furnish the statement within the prescribed time inconveniences taxpayers and leads to substantial revenue loss for the government.”

Department’s Response

The issue has been escalated to the Chief Secretary of Karnataka. With transaction data already available on the state’s Kaveri portal, officials have questioned why “technical issues” continue to be cited as a reason for non-compliance.

The income tax directorate is coordinating with the Department of Stamps and Registration to strengthen the Kaveri 2.0 platform and ensure smoother SFT uploads. Mullai Muhilan, MP, Inspector General of Registration and Commissioner of Stamps, confirmed that portal validations and technical alignments with the tax department are ongoing.

What It Means for Taxpayers

For property buyers and sellers, accurate SFT reporting translates into fewer mismatches, reduced scrutiny, and a smoother filing experience. It also supports the government’s larger push to broaden the tax base and curb undervaluation practices in real estate.

Action Point: Taxpayers should cross-verify their property transaction details in the AIS before filing returns and promptly raise disputes if discrepancies appear.