How a Flat Registration Reaches the Income Tax Department: SFT and AIS Explained
Buying a flat in Bangalore sets off a report that the buyer never writes. The office that registers the sale sends the details to the tax department, and they surface in the buyer's online tax account. This article explains the mechanism, the dates and amounts that matter, and how to keep a household's own records consistent with what the department sees.
The Short Answer
Registration offices file a yearly SFT, short for statement of financial transactions, covering property deeds above a value limit. From April 2026 the limit is Rs. 45 Lakhs, tested on the price or on the guidance value, whichever is higher. Deeds below both figures are not reported.
The statement is made by the state's registration officers on Form No. 165. Buyers and sellers play no part in it.
Legal Basis and Form
For years the obligation lived in section 285BA of the 1961 Act and rule 114E. The 2025 Act replaced it with section 508, and rule 237 of the 2026 rules spells out which transactions count. Those are buying or selling land or buildings, gifting them, and joint development agreements.
In Karnataka, the value adopted for stamp duty is the guidance value. The deadline is 31 May each year.
The Position Before April 2026
SFT-012 was the code for this report while the limit was Rs. 30 Lakhs. Consider a Rs. 38 Lakh flat registered in March 2026: it was reported. The same flat registered in May 2026 escapes the report unless its guidance value reaches Rs. 45 Lakhs.
Apartments in the city mostly clear both limits, so the change matters mainly for smaller units and plots in outer areas. Larger flats were reported before April 2026 and still are.
Why the Entry Appears Late
Registration offices report just once annually, when the accounts for the year are closed. A deed registered in June 2026 will show up after the 31 May 2027 deadline has passed and the data is processed. A buyer who looks a week after registration will see nothing.
The destination is the Annual Information Statement, or AIS, on the department's income tax portal. It gathers items reported by third parties against a PAN: salary, interest, share trades and property. The Taxpayer Information Summary is a compact version arranged by return heads.
Reading the Entry
A property item typically names the reporting office and gives the document date. It shows the sale value and the stamp duty figure, and it lists both parties' PANs. With co-owners, check how the value is allocated, because the full amount is sometimes shown against every owner.
To verify it, open the AIS for the registration year and hold the item against the sale deed. Check the amounts, the date and the PAN. If anything is off, the feedback option lets the taxpayer mark the item as correct, partly wrong, belonging to another PAN or year, or a duplicate.
The portal passes feedback on registrar items back to the reporting office for confirmation. Both the original and the revised value are then displayed.
Records That Should Agree
Several records follow a purchase, and the figures in each need to match:
| Trail | Who creates it | Applies when |
|---|---|---|
| Registrar's SFT | Registration office | From Rs. 45 Lakhs on price or guidance value |
| TDS of 1%, Form 141 | Buyer | From Rs. 50 Lakhs, resident seller |
| TDS on a non-resident seller | Buyer | Any value |
| Loan certificate | Lender | Every loan year |
| Capital gains | Seller | Year of sale |
The tax a buyer deducts appears as a credit to the seller and a payment by the buyer. If the deed says one price and the deduction form another, the department sees a mismatch. One figure in both documents prevents it.
When Questions Come
Routine reporting does not by itself attract attention. Queries follow when the purchase looks large compared with declared income and funds. The department then asks, normally online, how the money was arranged.
A home loan, savings, sale proceeds from an earlier home or a parental gift each give a straightforward reply if the papers are on file. A price far below the guidance value is taxed under section 92(2)(m), which is why both figures in the entry matter. Cash outside the deed is what the system is built to detect.
The Purchase File
Keep one folder holding the following:
- Registered deed and agreement for sale
- Loan sanction letter and disbursement statements
- Bank statements covering every instalment paid to the developer or seller
- A gift deed or signed note, with the donor's statement, if family contributed
- Papers and the gains calculation for any property sold to raise funds
- The deduction form and the certificate issued to the seller
Taxpayers earning over Rs. 1 Crore must also show the property in the assets and liabilities schedule of the return, at a cost that matches the deed. The EMI calculator helps decide the loan and own-funds split before any of this paperwork begins. More on the city itself is on our Bangalore page.
Sellers and Overseas Owners
The same report lists a sale in the seller's account, and the capital gain has to be declared for that year even if an exemption makes the tax nil. The department compares the declared price with the guidance value in the entry. Overseas owners are treated alike once their PAN is on the deed, and the NRI page describes our help for them.
